A Study Of The Trust Management On Pension Plan

The pension plan is of great importance not only as a politics policy but alsoan economy one. Under the circumstance of aging population, the old agesecurity is concerned as an urgent problem by countries all over the world.The aging problem in China is much more serious than other countries,because we came into an aging society at lower economy development level.That is so-called “ageing without enough wealth”. It is obviously that China’sprimary policies on old-age insurance can’t cope with the problem very well.Therefore, those will be the wise choices for China that establishing themulti-pillar old-age security system, importing the market operations, selectingthe trust management pattern under the funding scheme.The paper first describes the history of the old-age security in the world.Initially, the policy on old-age support was used as a tool to mitigate the socialconflicts. Afterwards, its economy functions were gradually found out alongwith the broadening coverage and the emerging of all kinds of pension plan.Nowadays, pension funds have becoming an absolutely necessary part ofeconomy, even acting as important institutional investors who possess a lot offinancial assets. To sum up, the management of pension plan acts as animportant and active role in providing for the aged, enriching the capital marketand promoting economy development.The paper discusses the legal features and functions of the Trust, analyzes thereasons why the pension plan finally selects the Trust pattern. The reasonsinclude macro and micro ones. Interim Rules on Enterprise Annuity and InterimRules on Enterprise Annuity Fund Management were published in May2004,which made it certain that China’s second-pillar of old-age security–enterpriseannuity–would be operated under the Trust model. The author analyzes thetrust relationships which surround the Fiduciary, the key role in pension plan,from many facets such as legal relationship, capital flow, order and information,etc. Further more, the author puts forward four key factors to establish an efficient pension market in China. The supervision system, one of four keyfactors, includes four levels: legal environment, government supervision,operation mechanism and social intermediaries. The risk management in pensionplan is another focus of the paper. The author analyzes different risk model andpossible risk spots in the pension operating mechanism. Accordingly, the riskcan be reduced practically in the pension fund management.