Research On Solvency And Investment Ability Of China Urban Basic Pension Insurance

With the speed of population aging situation increasing, the retired population and the expenditure of insurance system for urban employees grows continually. If the pattern of expenditure and revenue stays steady, the gap between them will be next to each other until2020, ultimately, the expenditure will excess the revenue. Which will lead to consumption, savings and investment decreased and have a bad impact on the economic transformation and stable social climate. Pensions can increase solvency ability by taking advantage of Chinese capital market to raise the rate of return of investment.Firstly, by counting population intergeneration structure, we classifypopulation intergeneration structure into X generation, Y generation, Z generation,silent generation and the baby boom generation. With the change of population intergeneration structure, Z generation becomes less.which make population intergeneration structure change into a handstand pyramid. Changed population intergeneration structure makes China become aging country. Until2020, the decreased number of Y generation and Z generation decreases the revenue of the pensions while the increased X generation and the baby boom generation increase the expenditure of the pensions. Aging of population makes financing pattern of the pensions changed.Secondly, the write takes ARMA modal to predict and analysis the revenue and expenditure of the pensions in the future, the surplus will be only200billion in2020, Coverage and accumulated rate will decrease gradually. If my pension fund income and expenditure patterns don’t reform and adjust effectively, the surplus of the fund will appear serious decline and the solvency ability of the funds will face serious challenge. Then we analyze and summarize the pension fund operation mode and investment ability, pointing out the problems and operation effect of the pensions and analyzing the inflation risk, the investment risk and the operation risk, then put forward the corresponding risk prevention measures. Raise the ratio of the funds entering into capital market decreases inflation risk, Perfect and standardize the market mechanism to provide a good market environment in order to guard against the investment risk and establish principal-agent mechanism to prevent operation risk. We have carried on the system analysis on portfolio construction of the funds. Construct a steady portfolio by holding different bonds and get the dividend income and capital gains income by investing blue chips and small cap stocks to pursue benefit. Pension funds and stock market China can mutually promote and develop. Pension funds can achieve value-added effect through investing in capital market, while funds can also promote the long-term healthy development of the capital market.Finally, we achieve conclusion and policy recommendations. Intergenerational aging population will have an adverse impact on future pension fund payments situation. Investment in the stock market is an important means to improve the pension fund income. Deal with pension fund solvency ability falling by increase investment ability. Pension funds and stock market has a role in promoting mutually. On this basis, we put forward the policy suggestion. Increases young generation by reforming China’s population policy and prudently increase pension fund investment scope. Increase the proportion of transferred state-owned shares to social insurance funds and actively develop commercial insurance to establish a multi-level insurance system. Increase technology innovation to promote the income level of pension fund. Solve China urban pension fund solvency and investment problem by the above policy suggestions.This paper consists of six chapters. The first chapter is introduction, including the background, theoretical and practical significance of this topic, introduce the main contents of the full text research structure.The second chapter is the basic theory of the concept definition and literature review. The third chapter analyzes the characteristics of system generation structure of the population in our country, the development trend and the impact on China’s future pension fund balance of payments. The fourth chapter empirically analysis and predict the revenue and expenditure of the pension by the ARM A model. The fifth chapter Analyze and study of pension fund investment and operation pattern. The sixth chapter reaches the whole research conclusions and policy recommendations...