Study On The Investment Risk Of Urban And Rural Social Endowment Insurance Fund And The Prevention

Since China has a large population, vast territory and abundant resources, it is inevitable that the culture and economic level varies significantly in different regions. What’s more, the urban and rural duality system even aggravates the non-equilibrium development between the rural and urban areas and the endowment insurance is a specific example to display the gap. In 2009, a pilot project for a new rural social endowment insurance system was launched and since then, rural endowment insurance has become a hot area in both the academic field and practice field. In February, 2014, it was decided by the State Council that a unified social endowment insurance system for urban and rural residents should be established. This unified system is in fact an integration of the full-coverage new rural social endowment insurance system with the urban social endowment insurance system and it was to be implemented throughout the country. With the urban and rural social endowment insurance system gaining a wider coverage, the accumulated fund increases constantly. Thus, effective fund investment and operation should be guaranteed to maintain or even increase fund value and to protect residents’ profits, which is of great significance to the stability of urban and rural social endowment insurance system and to the sustainable development of social economy.As a new system, urban and rural social endowment insurance system exposed many problems during the pilot process such as imperfect system design, system operation being affected by regional differences, system implementation being affected by factors such as economy, politics, culture, history, etc., uncertain influences of the system on external environment, etc. All these problems would cause the implementation of urban and rural social endowment insurance system to deviate from its expected goal. As we know, urban and rural social endowment insurance system is closely related to national long-term stability and is of great significance in coordinating and developing important strategies. Thus, with the system gaining a wider coverage, the following issues must be considered: how to improve efficiency, identify risks, take prevention measures, eliminate instability, achieve expected effects, etc.In the present paper, the author tries to identify the risk factors of the urban and rural social endowment insurance fund investment. By employing both qualitative and quantitative analysis, the author made an identification, screening and evaluation of the key risk factors. Besides, also explored how to achieve effective investment and operation of the urban and rural social endowment insurance fund. Finally, the corresponding risk prevention strategies for the urban and rural social endowment insurance fund investment were proposed. In the beginning part of the paper, the author first introduced the theoretical basis of urban and rural social endowment insurance fund investment and it mainly included such concepts as urban and rural social endowment insurance system, urban and rural social endowment insurance fund investment, the risk management of urban and rural social endowment insurance fund investment, etc as well as some related theories. Then, the author made an analysis of the current situation, problems and risk factors existed in the fund investment and operation of China’s social endowment insurance for urban and rural residents. Specifically speaking, in this part, the author first explored the problems existed in the fund investment and operation of urban and rural social endowment insurance. Then, as for the operation management of social endowment insurance fund for urban and rural residents, factors that may affect fund management were explored, especially those factors that may affect value-keeping and value adding of the fund. Finally, the causes of the problems as well as the risks were explored. Based on the analysis of the endowment fund investment and operation in foreign countries, the author made an evaluation of the major risks existed in the current investment modes by taking China’s actual conditions into account and it is hoped that the present research could provide some theoretical references for the investment and operation of China’s urban and rural social endowment insurance. Finally, based on the risk prevention goals of China’s urban and rural social endowment insurance fund investment, the author explored the risk prevention of urban and rural social endowment insurance fund investment with prevention measures and suggestions being proposed to improve the investment. Those measures and suggestions could also promote the sustainable development of urban and rural social endowment insurance fund or even that of the social endowment insurance system for the whole urban and rural residents.