A Study On Investment Capitalized Operation And Investment Performance Of Public Pension Reserve Funds

Population aging in the world has been an irreversible development trend.As aging intensifies,public pensions and health insurance payments to the elderly continue to increase,and the governments are exposed to huge pension payments.China,Japan and Korea are the countries with the largest aging population,the fastest speed of aging and the deepest aging respectively in the world.Moreover,the pension system is dominated by public pension in the above countries,the pressure of pension payment is self-evident.In this context,in order to maintain and increase the value of pension and ease the pressure of pension payment,it's an inevitable choice to promote pension into the capital market and realize the capitalization operation of the pension for China,Japan and Korea.The research object of Public Pension Reserve Funds(PPRFs)the paper takes not only fit in the timing of pension has just entered the capital market,but is a supplement to the research of the theory of pension finance in China.The paper compares and analyzes the individual situation of the pension system,then the operation mode and investment performance of PPRFs in these countries.Finally three aspects proposals of improving capitalization operation of pensions in China are discussed,which are improving independence of fund operation,perfecting the investment process and supervision system and optimizing the investment environment.First of all,the paper defines the subject in the study as PPRFs based on combing relevant theories and domestic and foreisn studies,summarizes the relevant concepts,then it introduces the Principal-agent theory and the Modern portfolio theory,which provides theoretical support for the diversification of pension into the capital market.Secondly,the overall status and trend of pension system development in China,Japan and Korea is compared and analyzed.The paper interprets the current pension system formed by continuous improvement within a few decades in China,Japan and Korea,finds that Japan and Korea has established a perfect pension management system.and all pensions have been entered into the market,while the process in China has just started.Moreover,the national council for Social Security Fund faces the challenge of investing both "reserve" and "contributory" pension funds.Thirdly,comparing the investment operation mode and performance of pension reserve funds among China,Japan and Korea,it is found that the investment and operation of pension reserve funds in the three countries are all subject to excessive government intervention.However,a whole set of pension investment and operation mechanisms has been established in Japan and Korea,which is not yet perfect in China.In particular,the actuarial estimation and information disclosure mechanism is basically lacking,and the investment performance is also unsatisfactory.Finally,aiming at the problems of the capitalization operation of SSRFs in China,put forward the following advice:one is to reform the investment and operation mechanism of reserve fund and strengthen the independence of investment decision-making.The second is to establish actuarial evaluation mechanism for pension and develop "indexing investment".Third,establish a pension financial supervision system covers macro,meso,micro-level regulatory organization.Fourth,establish and perfect the information disclosure system and make full use of the external supervision mechanism;Fifth,explore the investment mechanism of investing both "reserve”and pension funds,and develop indexed investments.