A Study On The Guarantee Lawsof The Return Of Basic Pension Fund

Establishing the basic pension fund is known as an international practice to resolve the worsening aging problem and realize our expectation of the elder being looked after properly.On the condition of expanded aged group and severe currency inflation,to enable the elder to share the fruit of reform and opening up and improve their living standard,we have to put the basic pension fund in investment market to maintain or increase the value.The security of the fund will affect not only the interest of the large retired group,but also the economic growth and social stability.From a micro level,the security could be guaranteed by the guarantee laws of the return of basic pension fund.The guarantee laws support the division of the fund,and ensure the investment return(principle and prime interest)of each portion.First of all,it is necessary to build the guarantee law system of the return of basic pension fund.The pension will be exposed to serious risks in fund investment,including risks from market,interest rate,inflation and management.However,the guarantee law system will reduce the risks from possible mistakes in decision making,investee selecting and unreasonable operations.The law system will expand the investment of pension fund so to maintain and increase its value.Moreover,it will contribute to a favorable market environment and improve the monitoring system of fund investment.As a result,the popular worry about the investment of pension fund will be relieved to some extent.Secondly,it is operable to build the guarantee law system of the return on basic pension fund.As a proof,in 2011,Nanjing municipal government employed social security fund in the investment of affordable housing,guaranteed by commercial banks.Meanwhile,outside the country,guarantee law system was built in America to keep company pension guaranteed by policy-based security company.Chile and Singapore established the guarantee law system for the return of individual account,which is in essence a government guarantee of the return,implicitly or explicitly.Our government has also realized that the huge burden of pension not only affects economic growth,but also puts pressure on government finance,since as the only person in charge;the government is responsible for any possible loss of basic pension fund.Therefore,building professional central guarantee fund company and selecting reliable guarantors could share the responsibility and reduce the government's pressure of elder supporting.Last but not least,we should stick to four principles in building the guarantee laws in consistent with our national condition,drawing on experience of other countries.First,we should inhere to the principle of government dominance,mandatory enforcement,free choice and justice.Second,we should build an agency to share the responsibility of government.For example,a central guarantee company could be set up to deal with basic affairs of the investment of pension fund.Third,we should take it seriously in choosing warranty mode.The best guarantee mode should be inexpensive,supported by transparent operation and protective but not restricting the use of the fund.Fourthly,guarantee object should be defined with care.Low-risk bond investment and bank deposit need not to be guaranteed,while risky investment in infrastructure or capital market should be guaranteed.By the way,the guarantee contract and procedures should conform to relevant laws and regulations.To conclude,it is necessary and theoretically operable to build the guarantee laws of the return of basic pension fund in consistent with our national condition.The system will play an important role in securing basic pension,ensuring investment return,stabilizing society and realizing sustainable development.