The Research On The Risk Management Model Of House-for-pension

China has stepped into the rank of aging countries ahead of time as a developingcountry when the economy has not fully developed with the lower per capita income.And the aging degree will become more serious. The supporting problem has alreadybecome a worldwide problem. It is seriously urgent to expand the approaches ofpension and improve the existing pension system. House-for-pension, as an innovativepension product which has been carried out abroad for years, will be an effective wayto resolve this problem. Its introduction and implementation will have greatsignificance for alleviating the pension pressure in China. House-for-pension, as aneffective complement for the security system, can not only improve the living standardof the elderly and alleviate the pension pressure, but also stimulate the second-handhousing market and promote the business innovation of financial institutions. Despitethe objective implementation conditions at present, there are still many obstacles dueto the lack of knowledge for this business, late start and the limitation of technology.One of the key problems is the identification and management of risk.The paper attempts to introduce the house-for-pension to the area of old-agesecurity. Firstly, it analyzed the concept and characteristics of house-for-pension,operation mode and the related theories and then identified the risk factors inimplementation process. What should be highlighted is that there are so many riskfactors, and this paper focused on just five factors, including life expectancy, housingvalue, interest rate, moral and policy. Secondly, it explained the influence mechanismby constructing a model, empirical analysis and other methods. Finally, the paper putforward the management measures and recommendations, such as the establishment ofalliance mechanism for house-for-pension institution, the securitization of asset forhouse-for-pension, the establishment of insurance mechanism for house-for-pension,asset portfolio and an appropriate loan-to-value ratio. The house-for-pension is a newcomplex financial product which needs the suitable market environment and thecooperation of multilateral institutions, especially the guidance and policy support ofour government. This model has reference value for the other developing countries despite the particularity of China.