Study On The Investment And Management Of The Social Security Fund Under Financial Crisis

Social Security System in China have implemented as a kind of formal institutional arrangements in order to maintain social stability, Social Security Fund as the material basis of the social security system, is the key to the Social Security System. At present, Social Security Fund in China mainly includes the Social Insurance Fund, the National Social Security Fund, and Enterprise Annuity. Among the Social Insurance Fund, including Individual Accounts Fund, the National Social Security Fund, and the Enterprise Annuity,Fund is accumulated a long time and the Scale is large,they are much-needed investment and get good returns. Meanwhile, the process of population aging of China is speeding up, Social Security Fund in China need hastily invest to increase its values. The investment of social security funds inevitable face the risk,so the investing management of Social Security Fund has also been put on the agenda.In 2008, the financial crisis swept the world,and the international capital markets become very unstable, Global Social Security Fund have a great loss, especially the Enterprise Annuity,which experienced a greater losses, the investment environment of Social Security Fund of China deteriorated sharply, The risks posed by financial crisis on Social Security Fund include market risk, speculative risk, moral risk, operational risk,which add to the hardship of investment and management of Social Security Fund. Therefore, how to prevent the investment risk of social security funds under the background of the financial crisis and protect the safety of social security funds as a major problem of this research.This paper analysis the investment status of the Social Insurance Fund, the National Social Security Fund and the Enterprise Annuity based on financial crisis,and find out the reasons why the management of the social security fund can not effectively response to financial crisis. These reasons include: first,the management system of Social Security Fund is not smooth.as the management system of Social Security Fund is decentralized,the administration and operations management have not separated clearly and the absence of regulation,which lead to the local government misappropriated the social security funds, At the same time this is one of the reasons of why our government strictly limited sources of investment of Social Security Fund.because lack of a good institutional environment,the investment and management of social security fund can not effectively address the financial crisis. Second,the investment of Social Security Fund. in a narrow range. China's Legislative lag limit the scope of the Fund's investments, and capital market imperfections also limited the Fund's investment options,so advent of the financial crisis the Social Security Fund can not broaden the investment channels for timely and spread investment risk effectively. Third,the proportion of investment is not reasonable.the investment ratio has not been timely adjustment when the financial crisis is coming. Social insurance funds are still clinging to its conservative investment strategy, the National Social Security Fund is not to lower the proportion of equity investment products, involvement in the volatile capital markets,and causing huge losses. Fourth, deficiencies in corporate governance fund .As the incentive and restraint mechanisms is not complete and the fund custodian did not effective regulation,so the moral hazard of fund Investment Manager will occur, combined with the professional standards of investment managers is not high, in the context of the financial crisis which has increased the social security fund operational risk. Fifth,the investment legislation system of social security fund is not perfect. As the investment legislation is more lag and the legislative level is low, legislation is too vague, the social security fund investment regulations in the absence of legal support, Social investment risks of Security Fund can not be effectively prevented.In the fourth part of the context, I mainly analyzed the investment and management of social security fund in foreign countries baced the financial crisis. First,the federal social security fund. In the context of the global financial crisis, the social security fund through a huge investment losses, but the federal social security fund have achieved excellent results, Its good management system and debt-based investment strategy worth our study, Second, the pension system of Argentina. the pension system of Argentina has undergone the most drastic changes,Argentine government nationalized private pension which give us such a revelation: strengthing the supervision of fund management companies and establishing investment risk compensation mechanisms.for social security fund. I give suggestions based on the specific conditions in our country in the fifth part. First: rationalize the investment and management system of social security fund ,Social co-ordinate the implementation of the Government centralized management accounts, personal accounts entrusted to implement operational management,and create a good institutional environment for the Social Security Fund. Second: the investment strategy to reform and innovation. To explore new investment channels, such as the issuance of special treasury bonds, infrastructure investment, green investment; According to the different nature of the reasonable adjustment fund investment ratio, the social insurance fund had better invest in special treasury bonds,and the Individual Accounts Fund ,the National Social Security Fund, and Enterprise Annuity shoud adhere to a relatively open but strictly investment philosophy. Third, strengthen the supervision of fund management companies. Establish effective incentive and restraint mechanisms, strengthening the responsibility of trustees, improve the information disclosure system, strengthen social supervision, fostering good investment managers. Fourth, establish risk management system for the investment of social security fund, a risk warning system and risk compensation mechanisms can effectively preventing the risk of financial crisis. Fifth, improve the the relevant legal system for the investment and management of social security fund.Background of the financial crisis, China Social Security Fund should take a more prudent investment management, it can not stop because of fearing the risk of financial crisis, not to quick success and blind investment,it had better uphold the value investment philosophy, and I think it is a good way to effectively prevent the social security fund investment risk.