Research On The Stock Market Investment Of Basic Pension Fund In China

Along with the deepening of the reform of China’s pension system, the basic pensionfund system for urban workers constantly improve, there has been three pillars of theformation: the basic old-age insurance, enterprise annuity and commercial personal pensionplan. With the continuous expansion of the coverage of the recent years, China’s pensionfunds size continues to expand, especially the first pillar—the basic pension fund. By the endof2011, the basic pension fund accumulated balances nearly two trillion Yuan, how to investand manage such a huge scale fund against the risk of inflation become the focus of thecommunity. The same time as the aging population in China, to prevent future pensionpayments crisis, the basic pension fund also has enormous investment pressure. Due to therestrictions of the investment system, the basic pension fund does not yet large-scale invest inthe stock market, leading to its face the risk of depreciation and welfare losses. Therefore,reforming of the basic pension fund investment management system, to promote the basicpension fund invest in the stock market is the trend.Firstly, from the status of China’s basic pension fund investment and operations, thispaper made a comprehensive analysis to China’s basic pension fund, pointed out the problemsin the basic pension fund’s investment and operation. Then from the inherent requirements ofthe basic pension fund development, the objective needs of the development of China’s stockmarket, as well as the interaction of pension fund and stock market, point the necessity of thebasic pension fund investment in the stock market. Focus on analysis of the feasibility of thebasic pension fund investment in the stock market through public pension fund investmentexperience of abroad and kinds of pension at home and relevant policy guidance. On the basis,further description of feasibility that the basic pension fund investment in the stock marketthrough the empirical analysis of the National Social Security Fund invests in the stockmarket. Once more, objectively clarify that the basic pension fund investing in stock market isfacing many obstacles, including institutional barriers, difficult operation. Finally, put forwardthe main measures to alleviate and overcome the current obstacles, and made the relateddesigns to the operating model of China’s basic pension fund investment in the stock market.