Research On The Impact Of Basic Pension Funds On Stock Market Of OECD Countries And The Enlightenment On China

In the 90s of the 20th century, pension system in OECD countries generally face the challenge of low speed of economic growth, aging of the population structure, the fiscal deficit rising, in order to get rid of the crisis, the pension system has been reformed, one of the most important points is to realize its value, the pension fund investment in the stock market. And our country is faced with these problems at present, and has been working to find a way to solve the problem. Along with the deepening of the reform of China’s pension system, the basic pension fund system for urban workers constantly improve, there has been three pillars of the formation:the basic old-age insurance, enterprise annuity and commercial personal pension plan. With the continuous expansion of the coverage of the recent years, China’s pension fund size continues to expand, especially the first pillar—the basic pension fund. By the end of 2015, the basic pension fund accumulated balances nearly three trillion Yuan, how to invest and manage such a huge scale fund against the risk of inflation become the focus of the community. Formerly, the arguments are about whether the basic pension fund should be invested in the stock market. With the publishment of the management method, the basic pension fund is ready to be invested in the stock market. With the increasing problems as population aging and extending the deep fractures in the construction of pension fund, the Chinese Policy-makers and executors are facing unprecedented challenge.In this background, this paper focus on the relationship of the basic pension fund and the stock market, using methodologies as theory modeling analysis and confirmative study to discuss the issues about the basic pension with its long term and stability and scale, as a natural institutional investor, has a positive impact on the development of the stock market, and state solutions and recommendations. In this paper, firstly, the history and currently developing status of the pension fund and the stock market has been reviewed; secondly, the effect of the basic pension fund’s on the stock market scale development:using theory modeling analysis to prove that the basic pension fund has a positive impact on the development of the stock market. Thirdly, the confirmative study shows that the basic pension fund can expand the stock market’s total value and weaken the price fluctuations. Finally, the paper offered the policy-level recommendation that suggesting the basic pension fund shall enter the stock market and generate the good interactive effect.