Capitalized Operated Legislation Supervision Of Social Security Fund

At present, the reformation of social security system has been the key point of the economic system reform of our country. The governments all over the world are paying more attention on the maintenance of value and appreciation of social security fund, because it is related to the vital interests of every social member. While the realization of the maintenance of value and the appreciation, its basic method is to realize the investment and operation in capital market. However, high yield funds and high risk in capital market are coexistence, so it needs exert balance between the yield and the risk. Especially social security fund that is different from general securities investment fund is the money for fostering life of the ordinary people; its characteristics and usage determine its operation of offering must set the risk control and fund safety and security in the first important position. While the chief principle of abiding safety must fully understand and analyze the risk when social security fund entering into capital market, and formulate relevant risk aversion system and supervision and management system, so that social security fund can realize the balance between productiveness and safety.Investment risk of capital market is relative higher in our country, one key reason caused such result is that risk hedging and hedged financial instruments that supplied to be selected in our incomplete capital market are relative deficient, while the overall system risk of securities market is much higher. China has established the investment system of social security fund for years. However, it is believed that this new system has more problems than achievements. The author introduces lot of portfolio tools, strategies, methods those applying succefully for the investment of social security fund in many countries. In addition, in consideration of that social security fund invested in offshore capital market has been the international trend, our country's social security fund will have a try in this direction, here, it is made international comparison and used for reference. At last, this paper develops some systematic suggestions and operating methods to decision-makers on designing and reforming investment system of Chinese social security fund, based on the two basic types of pension systems: pay-as-you-go(PAYG) system and fully funded (FF) system.In social security fund operation system, investment manager plays an important role on guaranteeing maintenance of value and appreciation of social security fund, all subjects need to carry out effective control to it. A perfect effective control mechanism has significant meaning in regard to regulating investment managers'operation and risk precaution, but imperfect current control mechanism itself causes hardly ideal control effect and even increases investment risk. Under this background, how to perfect the investment manager control mechanism on current social security fund is the concentration of this paper.Through analyzing on investment operation of social security fund and the mode of supervision and management from typical countries, Chile and America, that have precursory meaning in capitalized operation of social security fund, it is gained the successful experience and failure training. The author has proposed feasible suggestions on strengthening and perfecting our country's operational supervision and management of social security fund on the basis of analysis on the status of our country's social security fund investment and supervision and management.This paper is constructed by introduction and text. The introduction contains the background of his choice, the significance, and research thought. And the main body of the paper is divided into five chapters; the content of each chapter is mainly introduced as following:In the first part, it is mainly introduced the subjects that social security fund entering into the capital market through theoretical and practical analysis to divide different kinds of social security fund and to carry on different control measures. According to The Three Pillars pension managing scheme recommended by World Bank, it is strictly forbidden for overall financing funds entering into capital market, and is limited the investment stock market including permitted accounting funds, enterprise annuity, national social security fund and etc.In the second part, through introducing the public process of entering into the capital market of our country's social security fund, it is indicated that, severe lagging of Chinese social security capital investment system at present is illustrated that the central government doesn't undertake the minimum responsibilities, that is, the government doesn't undertake the responsibilities for designing a set of much more ideal investment vehicle for the investment system. The investment operational management of social security fund is a complex systemic project, the core issue is how to correctly guarantee the relationship between risk and return, and needs a law to ensure funds security and the realization of the appreciation. This chapter is to summarize the experience from the investment practice of our social security fund and to propose some opinions of the author.In the third part, through analyzing the trust law foundation and the law structure of social security fund investment operation, it is obtained that the basic concept of trust system is mostly in line with the characteristics of social security fund, and there are deep theoretical root of the trust system through utilizing the trust system to arrange social security fund investment operation. According to the principle of the trust law and the mode design of Temporal Method and Trial Measures and the managing operation practice of social security fund, the author considers that, the legal relationship among the truster, funds manager, investment manager and custodian should be trust relationship; the client is the truster and beneficiary, while the funds manager, investment manager and the custodian are belonging to the position of trustee in the trust relationship, those three kinds of people are entrusted by the client together, doing their own role and standing separately. Meanwhile, the agreement of the investment manager's rights and obligations means the core content of the trust law relationship; while whether the custodian can reasonably restrict the rights of the investment manager and gain the balance among the three kinds of people is key important for whether social security fund can operate normally. Through jurisprudential analysis on the national social security fund control operation, it is shown that the way carried by board of directors is a self-benefited trust; the government's definition on funds property rights is inaccurate, which has infringed collective ownership of overall financing and individual ownership of accounting funds. As for the overall financing, the client should be undertaken by the nation and social security group as the trust relationship of social security, and it will be significant legal means and realistic means to understand such relationship as public-interest trust; in addition, as for accounting funds, the government should fade the administrative color and formulate a more careful laws and regulations to limit to market risk and moral hazard of accounting funds, leave contract space and market factor of individual pursuing efficiency, and form a self-benefited trust relationship between the individual and the intermediary agents.In the fourth part, through analyzing the mechanism of action of control mechanism, investment manager control mechanism of social security fund can be divided into external mechanism and internal mechanism. While the internal control contains five aspects of environment control, risk evaluation, control activities, information and communication, and internal supervision; the external control is constructed by selecting and retiring control, investment supervision system and performance evaluation. Investment manager is the key for determining the maintenance of value and appreciation of social security fund. Whether the investment manager can carry maximized implementation according to the benefit of social security fund itself is determined by whether management system of social security fund can be form an effective control mechanism for it. The author reveals that the current control mechanism is insufficient through analyzing the poor market performance of the investment manager, analyzes the control superiorities of all subjects on this basis, evaluates on the control mechanism of the investment manager and proposes relevant legislative proposals.In the fifth part, through the discussion on the object, system, mode, organization structure and the main content of the social security fund supervision and management, it is revealed the existed issues of our country's social security fund on those aspects. And through comparing and drawing lessens from overseas mature experience, it is proposed relevant legislative proposals in order to standard legislation supervision of social security fund.On the basis of drawing lessens from overseas advanced experience, to cautiously and prudently proceed social security fund into capital market is a contribution to the promotion of deep reformation, economic development and stable society, and then social security fund will have a bright future.