Basic Pension Insurance Personal Accounts Fund Diversified Investment: Gains And Risk Aversion

With the fact that aging of population speed is accelerated, the common pension, which is on the base of the pay-as-you-go system and take tax revenue as financing way, has already unable satisfy actual need more and more. The common pension plan is not only fail to guard against old age population effetely, but also bring about a very big financial burden, and as the result of hiding the long range economic growth. Because of this, the countries from all over the world had begun to reform this pension welfare system formed after the Second World War from the last century. The reformation of the Basic Old Age Insurance of our country is started in 1997, the target of which is to fund a system pattern integration of social pool planning with personal account. The social pool part is on the pay-as-you-go system and takes short-term inner fund balance between income and expenditure as target, belonging to the defined contribution (DB); the personal account part adopts complete fund accumulation system. The pension is paid according to personal account funds including the fee and the income of investment, belonging to defined benefits (DC). China introduced the real individual account in the Basis Old Age Insurance recently. Under the system of independent account, the individual account fund is separated from social pool fund and runs in the model of "full account" with the fund accumulated and the "empty account" is made full individual account will confront with strong pressure of maintaining and increasing its vale. So the "full account" funds have already become important parts of economic life, but also closely related to the young capital market. Why the social security funds must be invested in the capital market? How they enter the capital market? What kinds of portfolio should the funds choose, And how to operate --all these theoretical and practical problems must be resolved. Based on the theory portfolio selection, using the capital asset pricing model, this paper focus on the portfolio the personal funds could devise after they entered the capital market. After quantitatively analyzing the income-risk in China's stock market, the national debt and the bank deposits, then use them as means to construct different portfolios; I computer the income-risk data of these portfolios. Through the resulting analysis, the conclusion is: although the risk in china's stock market is considerably high, portfolios with lower ratio investment of stock can obtain the advantage of diversification.