The Study On The Legal Supervision System Of The Investment Of China’s Social Security Funds

Social security funds are established to make up for the pension shortfall caused by the aging population by our government as strategic reserved funds. It is an important material basis to ensure the stable development of the social security system, which is related to the vital interests of every member of the society. With the reform and improvement of the social security system, there are a lot of accumulated savings after the normal payment. The more savings there are, the greater risk of devaluation there will be. Therefore, it is a key issue to increase the value of the social security funds, which relates to the stability and orderly development of our society. Considering the operating experience of the Western countries’ pension funds and the achievement of our social security funds’ operation, it is an inevitable choice to invest social security funds in the capital markets to increase their value when facing the enormous pressure from the inflation and the aging population.The social security fund is different from other ordinary investment funds. It is not only the material guarantee of the social security system, but also the people’s "living money". This special nature of the social security funds requires an extremely careful investment, trying to reduce and avoid risks to ensure the safety of the social security funds. But the benefits always go hand in hand with the risks in the capital markets, so we need to weigh the benefits and risks of investment in order to realize high return and low risk. Besides, considering the inconsistent goals and interests of both sides, the behavior of the social security fund investment managers should be regulated effectively so as to prevent blind investment and speculation in the capital markets.How social security fund investment results, whether the desired investment objectives can be achieved, whether the market risks can be effectively avoided, and whether is the fund manager’s investment behavior standard as well as professional, all of these are direct reflections of the social security fund investment laws’ regulatory effect. Therefore, the security and benefits of the social security funds can be realized only after a sound social security fund investment supervision legal system is built to guard against the risk of capital market and strengthen the supervision on and investment behavior of the social security funds’ managers. Although a specialized legislation has already been enacted in2000to control the investment risks and regulate the investment of social security fund managers, but with the deepening of the social security fund investment in the market, there are some flaws exposed in China’s social security fund investment regulation legal system. Therefore, starting with the necessity of social security funds’ supervision, this paper introduces the social security fund investment regulation mode and the specific regulations taken by different countries systematically. Then this paper expounds China’s social security fund investment regulatory system, points out its defects through analysis and gives some suggestions to improve and perfect our legal system of social security funds’ investment.