In this paper, published national core periodical "by the world economic and Political Research Academy of Social Sciences, International Economic Review" 2007 No. 9/10 no..

 

 

 

America agencyEnlightenment of insurance fund supervision legal system on the Chinese classification

 

China University of Political Science and Law law and Economics Research Center Dr. Hu Jiye

 

Abstract

 

The legal supervision of the federal government USA operations of the first pillar pension fund strictly almost harsh, security mechanism on the second pillars of defined benefit type of private pension insurance mandatory, to ensure the efficient operation of the entire social security system. Because our country is currently no relevant legal supervision over social security fund of social security funds, corruption case occurred frequently that our country supervision of social security fund is actually no strict legal basis of embarrassment, reference America on social insurance fund regulatory classification of legal system, to provide beneficial inspiration for China's social security fund for the classification of the legal supervision system.

 

Keywords: Social Security Fund  The private pension  Legal supervision

 

In recent years American presidential campaign, the debate of the hottest besides abortions, is social security. In 2001 President George W. Bush came to power on a proposed aspiring social security reform plan, but they have not successfully implemented. Find relief in is: in 2006, George W. Bush signed to raise the federal pension insurance fee rate of the presidential decree, fortunes is facing a financial crisis the federal pension insurance company. In recent years, the social security in American and China, have become a hot issue of concern to the people.

USA social security system has a long history, the construction of legal system is perfect, there is also a relatively mature experiences in the social security fund operations and regulatory classification, worthy of our reference. American law on the federal level, state and private pensions and its regulation is different, the first part of this paper, analysis America federal and state government social security funds, operation and supervision, the second part introduces the USA private pensions and annuities legal supervision and insurance mechanism, the third part of the social security legal system is perfect China's social security fund supervision in the process of legislative proposals.

 

A,      The government of the public AmericaThe legal supervision of social security fund

America law on supervision of social security fund relates to multiple single law, from the object of insurance, insurance, social security fund project types and operation and management, are fixed in the form of law. This article first introduces the legal supervision of social security fund for the direct operation of the government.

1, "Social Security Act" of the federal social security fund raising, supervision of the relevant provisions

In 1935, America Congress passed the "Social Security Act" (The Social Security Act), which is America history of a complete social security law, is also the first time proposed in the world "social security" (Social Security) concept. American federal social security fund is a government based on the "Social Security Act" and its amendments imposed wage tax the federal old age, survivors and disability insurance trust fund (Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, referred to as OASDI, commonly known as the Federal Social Security Fund --Federal Social Security Funds), through the collection of social security tax to achieve an annual salary of employees, tax rate for the first $9000 of 6.2%, employers pay the same proportion, a total of 12.4%, is the second largest tax USA behind the personal income tax, the biggest spending projects in each of the social insurance is America federal budget. The OASDI consists of two sub funds: OASI patients, survivors insurance trust fund, which is the basis of social security act of 1939 amendment 201st terms and the creation, under the amendment created a trust fund trusteeship council, launched in January 1, 1940, it provides automatic spending authority, a monthly payment to retirement employees or deceased employee retirement survivor. DI is the disability insurance trust fund, which is based on the revised 1956 Social Security Act created, began to come into effect on January 1, 1957, shall be paid to the disabled employees or their beneficiaries. The federal social security fund hold up half the sky America elderly people live, the more low income elderly more dependent on it. According to statistics America Department of social security, in 63% of the retired population, the federal social security fund payment accounted for half or more of their retirement income. Payment of income over the age of 90% in 1/4[1]. Even the Americans the most important identity card number is also called the "social security number", visible Federal Social Security Fund for ordinary Americans is how important.

According to the annual report released in 2006 OASDI Council, by the end of 2005, OASDI coverage has reached 159000000 people, including almost all adult citizens (except USA take part in state civil service retirement fund). There are 48400000 people get OASDI fund, annual expenditure of $521000000000. When the federal social security fund revenue of $702000000000 in total assets, the profit of $1858700000000, equivalent to 12.8% of the total USA when GDP[2].

 

2, "Social Security Act" on the strict supervision of the Federal Social Security Fund Investment

According to the social security act of 1983 amendment, the Social Security Fund Council consists of 6 members, of which 4 members were Treasury Secretary (chief custodian), the Labour minister, Minister of health and social security. The other two members of the general public as the representative appointed by the president, the Senate approved a term of four years, the social security administration with a special deputy director of fund day-to-day affairs. The Council is responsible for the federal social security fund balance of payments situation assessment, decision and management of investment, annual report to Congress to fund balance, and puts forward the short-term (10 years) and long-term (75 years) to predict fund condition, according to the long-term prediction of the federal social security fund investment and the corresponding suggestions.

 Although American advocating economic freedom and the opening of the market, but the government investment of the social security fund has a strong sense of risk. Social security law American has restricted strictly to the social insurance fund investment, in the Federal Social Security Fund in the market are very cautious, conservative anomaly. The federal social security fund assets, except for a handful of cash and bonds, all the investment in America Treasury for Federal Social Security Fund issued special treasury bonds, because the "Social Security Act" provisions of the federal social security fund investment is to yield type can only invest in the American government guarantee on the interest of securities. According to this law, by the end of 2005, all OASDI assets are the annual interest rate from 3.5% to 8% years of special national debt and debt securities, not a penny stocks and other risky assets[3]. At the same time, the federal social security fund should not only unified and centralized management by the federal government, and the balance of payments surplus must also invest in securities backed by the federal government with interest, the interest earned the trust fund was deposited. So, American government by law strictly to ensure the shall not be used to buy shares or investment trust, real estate development and other aspects of the Federal Social Security Fund investment. In addition, "penal code" American Federation have to "pension and welfare fund embezzlement crime" penalties, including penalties for violators is very strict, so dare to defy the law occupation, misappropriation has federal social security fund who had no precedent.

The Ministry of finance, Ministry of labour and social security department, the Department of health administration of social security fund, social security fund day-to-day management and operations, the federal social security fund more than two lines of revenue and expenditure, also formed the income, expenditure, management strict separation system. 1994 USA established independent of administrative departments, the cross party "Social Security Advisory Committee", consists of 7 people, the president appointed 3, ginseng, chairman of the house of representatives are appointed 2, all from the same party appointed shall not. The Commission on the social security fund supervision, consultation and evaluation on the overall effect, to ensure that the federal social security fund supervision beyond the partisan, more objective, justice.

 

3The state social security fund investment, public security and public

 The federal USA, legal states has important guarantee role for public pension fund. According to the provisions of the 1983 amendments to the "Social Security Act" in article 218th, each state is established, the Social Security Administration (the State Social Security Administrator, SSSA), the state established mainly for government officials, teachers, police, firefighters and other public officials, judges relatively generous social security project.

Part of state civil servants did not participate in the OASDI, in order to fund the California civil service retirement maximum (California Public Employees' Retirement System) as an example, in June 30, 2006 to cover the state government, teachers, police and other public officials more than 1000000 people, assets of $211200000000, of which about 60% are stocks, 25% bonds, the other is short investment, real estate investment etc.. Fiscal year 2006 received contributions of only $3100000000, the investment income is more than $21600000000 in assets, rate of return on investment as high as 11.4%[4].

The operation and management of all the state pension funds are subject to external audit and supervision of the public, the public can be made at any time and asked questions to the pension management institutions. The legal system of the public so that social security funds, operation, use is under the supervision of the public environment. Legal constraints to ensure the social security funds are not diverted, and stable value, and all levels of government and scholars, people for the social security fund responsible attitude and effectively guarantee the healthy, normal social security fund. State pension management institutions although relatively independent operation, supervision, but also between each joint action, such as common supervision, prosecution of a pension investment in large enterprises, joint research some long-term strategic issues, continue to advocate and strengthening the investment of moral principles.

 

Two,      USA privateLegal supervision and guarantee pension

 

And the first pillar of the Federal Social Security Fund OASDI in less than 70 years of history, American second pillars of the private pension history long, even can be traced back to the USA independent before British colonial era, and American express company (American Express Company) is the first private employer pension plans began in 1875, more than 130 years history[5]. American private pension includes private retirement accounts (Individual Retirement Accounts, referred to as IRAs) plan, employer sponsored pension plans (such as 401 (k) plan, 403 (b) plan), the latter is the main characteristics of employer sponsored, individual is entirely voluntary, the government to give tax concessions. The second pillar pension assets originally appeared in the name of the individual account, so it is also called private pension, or occupation pension (Occupational pension), the employer pension (Employer Pension). The Employee Retirement Income Security Act "in 1974 Congress" (Employee Retirement Income Security Act of 1974), the government of the private pension not what regulation, through the law after the Federal Ministry of labor became a private pension plan management department, responsible for private pension funds supervision, the Ministry of Finance and other government departments to play a supporting role. Congress also amended the "domestic tax law", all for the purpose of endowment insurance fund investment interest be tax-free.

 

1American, individual retirement accounts (IRAs) plan

The IRAs program is based on USA tax law provides for individual retirement account preferential, deferred tax plan, namely each year to an individual retirement account, tax exempt deposit 2000 dollars, only to withdraw only pay income tax. Individual retirement account provides a guarantee mechanism of self motivation for employees. Establishment of pension security system for the small and medium enterprises to encourage the following 100 employees, a bill through Congress in 1996 American founded the "simple individual retirement account plan", some small business employees to the plan of individual retirement account to more than $2000 / year of tax payment, the employer must also pay the fees equivalence the only employees, from the plan drawing will be tax. In 1997 American Congress passed Ross individual retirement account (Roth IRAs) Bill, for individual retirement account withdrawals made further amendments, in accord with certain conditions be exempt from individual retirement account withdrawals. Due to retire from the total income of individual retirement account withdrawals is relatively less, so tax amount is less, individual retirement account plans to tax deferred, on the whole life cycle consumption peak effect.

 

2Different pattern, private pension plans

Development so far, and pay if the accumulation to divide, USA private pension plans can be divided into definite plans for treatment (Defined Benefit Plan) to determine the type of plan and payment (Defined Contribution Plan) two. Before the twentieth Century 80's enterprise pension plans to defined benefit plan model, then defined contribution plan is extremely rapid development, whether from the plan the quantity or from the ownership of assets are beginning to plan identified over treatment. According to the America Employee Welfare Institute (Employee Benefit Research Institute) of the "pension investment report", by the end of 2003, defined benefit plan total assets of $1893000000000, $900000000000 in stock, bond billion dollars to 423000000000 dollars, cash and cash equivalents of $187000000000, $383000000000 of other assets. Defined contribution plans have retirement assets of $2178000000000, $739000000000 in stock, bond billion dollars to 229000000000 dollars, cash and cash equivalents of $131000000000, $1080000000000 of other assets[6].

In employer sponsored pension plans, 401 (k) plan is currently one of the most widely American pension plan, is a kind of cash or deferred payment arrangements (cash or deferred arrangement). 401 (k) plan name from the twentieth Century 80's "tax law" section 401st (k), which allows employees to be part of the pre tax salary in a savings plan, accumulation to retirement. In accordance with the provisions, as long as there are more than 5 employees, we can set up a 401 (k) plan. Usually, employees will authorize your employer will pay part or all of the employees into account, the highest to 15% wage into the account, but the deposit amount shall not exceed $15000. In addition to individual cases, 401 (k) plan members cannot extract the money before the age of 59.5, otherwise not only to pay taxes, but also pay a 10% penalty. As with a number of advantages, in recent years the program has been more and more employers to adopt, become a kind of innovative financial products across the insurance, savings, investment, loan business. Program participants had two choices: one is to directly accept the employers pay cash reward; two is the employer to this part of the cash directly to the tax payment in the form of profit sharing or stock bonus plan account. "The Employee Retirement Income Security Act" and "domestic tax law" did not require employers must be 401 (k) payment participants plan, but most employers are active for its employees equal pay, to encourage employees for their future retirement savings. This is to encourage low paid employees to actively participate in the 401 (k) plan, and adding a effective method for tax payment. Due to the low salaried staff is more likely to 401 (k) plan for tax payment, the tax law American about 401 (k) each participant plan tax payment cannot exceed a fixed number, figures regularly linked to cost of living adjustments, such as the 2001 annual payment limit is $10500.

In American, often personal investment in retail financial services, the chamber of Commerce mandatory minimum investment amount (such as $1000). In 401 (k) plan, individuals can not "restricted minimum investment threshold" concessions, and can select the personal account of capital investment in the professional management of the fund. In order to avoid unnecessary early withdrawals, many plans for the loan terms, in order to solve the needs of employees for emergency funds, the individual account loans do not need to pay taxes and penalties, the buckle pay money way to repay the loan principal and interest. Although the 401 (k) plan to start a large-scale promotion in twentieth Century 90 time, because it is the investment fund in the pension market share provides a rare opportunity, become residents of fund investment, self security an important channel for the future. For example, the California Civil Service Pension Fund (CalPERS) participants can through 401 (k) plan contributions[7].

403 (b) operation and tax plan and 401 (k) plan is very similar, but not exactly the same. First of all, only free of income tax organizations or institutions such as government departments, education or charity, part of the non government organization (NGO) are eligible to host or funded 403 (b) plan, its investment and 401 (k) is not exactly the same, only to buy an annuity or mutual fund. With 401 (k) plan, in 403 (b) plan employees will be part of their salary through into the employer's 403 (b) plan, the pay from the amount of taxable income of the current period is deducted and reach the purpose of tax cuts. By the end of 2004, all kinds of private pension assets total $4.44 trillion record, equivalent to USA GDP 1/3 above, more than 2 times the Federal Social Security Fund assets. The investment stock mutual fund $1.69, $1.17, $0.71 of credit market, combined assets of $0.59, $0.33 American government bonds[8].

 

3, supervision and guarantee mechanism of private pension plans

Although many people American looks like 401 (k) plan is the best way of pension investment, but because many employees because of equity (or options) to encourage and direct holdings of the company's stock, once the service enterprises, employees are likely to fall into retirement savings and work away predicament. Considering these risks, American Congress in 1974 through the "Employee Retirement Income Security Act", is strictly prohibited enterprises establish non fund pension plans, while the establishment of direct government management of the "federal pension insurance company" (The Pension Benefit Guaranty Corporation, referred to as PBGC), for the protection of employee retirement after the original work unit defined benefit type pension plans and pension security failure. "The Employee Retirement Income Security Act" provisions for the accumulation of private pension plan, the federal government pension insurance companies to charge higher premiums, to prevent the enterprise moral risk. The twentieth Century 80's some companies terminated pension insurance scheme and will fund balance to all, American government to these enterprises to suppress the similar behavior tax penalty. "The Employee Retirement Income Security Act" gives the federal pension security company to any institution or individual in violation of the law to determine the type of pension plan is at the termination of the investigation and inspection of power in the treatment, and may be related to violations of civil lawsuit.

Because different enterprises have different pension plans, according to PBGC's 2005 annual report, to September 30, 2005 covering 30400 defined benefit pension plans, about 44100000 employees. There are currently 3520 pension plans because of various factors to bear the original employer commitment by the federal pension security company, relates to the number of employees is about 518000. In accordance with the relevant provisions, PBGC will pay 65 years old retirees pensions in plan 2005 bottom up for $3801.14/ months, i.e. $45613.68/. Although PBGC is government agencies, but did not get a grant from the government, the source of income is divided into two categories: one is for the single employer pension plans, each player needs to pay $19 / year of insurance, also need to pay the total amount of 9 ‰ insurance plan. To 2005 the end of 9, a total of the single employer pension plan 28800, covering the number of employees for 34600000 people. Another kind is for two or more than two employers by collective bargaining and trade unions to reach a pension plan, such as truck drivers, retail, mining, garment industry unions, the collective negotiation results, involves widely, the risk of single employer is lower, each participant only needs to pay $2.6 / year of insurance, no longer need to follow the plan shall pay insurance cost total. To 2005 the end of 9, a total of the multi employer pension plan 1600, covering the number of employees for 9900000 people[9].

Enterprise pension risk the latest example is beautiful couplet boat. In 2005 May, is located in Chicago America bankruptcy court ruled, agreed to United Airlines (United Airlines) bankruptcy terminated 4 employee pension plan it, shifting its financial burden to the government of the federal pension insurance company. This decision makes the United pension gap of $6600000000 all passed on the federal pension insurance company to assume this is the case, since the government began to America private pension has been the biggest guarantee 30 years of a government for the enterprise ".".

Thus, the federal government pension insurance company (PBGC) plays an important role in the American private pension security system, set up the last safety net for private pension market operation, "the Employee Retirement Income Security Act" also "transparency" for free investment enterprises and individual employees, to avoid the principal loss of employee pensions similar "united" this problem. At the same time, the legal supervision on private pension plan is mainly confined to tax arrangements, due to individual employees have the final say on their own account, the legal limit retirement before withdrawal, whether individual or fund management company, to avoid short-term behavior, private pension investment basically is long-term investment rational, become the backbone of the capital market, but also to enjoy the fruits of economic development.

In addition to "the Employee Retirement Income Security Act", USA Tax Bureau identified by the "tax law" of the private pension tax incentives qualification, establishment, operation and supervision of the audit, tax policy termination of each plan, at the same time also set up special "employee plan voluntary corrections act in violation of regulations system" (Employee Plan Voluntary Compliance Program), introduced the "self regulation" mechanism, reduce the private pension plans in tax inspection by the cancellation of the preferential possibilities. "Labor law" on the fund manager is in accordance with the "prudent man" regulatory principle, is the plan assets in a separate trust, public disclosure and reporting is in accordance with the legal requirements for supervision, "Securities Act", "investment company law", "investment adviser" also from different parties in the face of private pension investment supervision, to ensure the healthy development of the private pension. The private pension has become the largest institutional investors USA capital market, has become the cornerstone USA financial stability to a certain extent.

 

Three, the Chinese enlightenment

 

2006 is the Chinese supervision of social security fund exposure problems a year. In July, the Shanghai social security fund corruption cases shocked the nation; in November, the National Audit Office issued sixth audit announcement points out, the country except Shanghai and more than 7100000000 social security funds suspected of illegal operation. These problems show that: the biggest problem facing China's social security fund is the lack of supervision, although the central give repeated orders and injunctions, but some places are still the social security fund as their "money" and other channels, resort to deceit and fraud phenomenon exists in pay, support, pipe and other links of social security fund. Strengthen the supervision of social security fund has become the government, the legal profession and the public consensus.

Chinese market economy under the conditions of the establishment of the social security system and social security funds only 20 years of time. As the social security fund is a new thing, to its supervision over preference and rely on administrative supervision, resulting in significant defect of supervision system of social security fund in china. Administrative supervision may be affected by bureaucracy, rent-seeking and other effects of failure, and easily ignored and suppressed by other supervision resources development and utilization. The existing fund supervision system lack specialized supervision, social supervision system arrangement of right and responsibilities and too general, norms for the regulatory responsibility of social security fund, the lack of clear legal provisions, there is no legal responsibility for its effective mechanism caused by the behavior of the social security fund losses. Regulatory lag of legislation of social security fund directly affect the level of transparency of social security fund, but also directly affect the social security fund, enrich and expand. Therefore, the social security fund supervision legislation be imperative. The legal system of social security fund supervision from America classification, there are several revelations to be China's social security fund supervision legislation:

1, to ensure that the social security fundThe legislative principles fundamental interests and beneficiary participation

The social security fund supervision legislation must first implement the social security object and the fundamental interests of the beneficiary for the sole purpose of principle. High yield USA first pillar social security fund supervision and the second pillar of private pension, respectively, to meet the safety and benefits of principles, these principles are to the fundamental interests of the beneficiary. China social security fund as "money", the aim is to protect our supervision of social security fund participants and beneficiaries of the future, regulatory legislation process must always follow this principle.

2Different types of social security funds, classification regulation

Reference America classification supervision system for the first pillar pension funds and private pension, our country should be in the relevant government regulations of the State Council, Ministry of labor and social security on the basis of the National People's Congress, formulate a unified "social security fund supervision law" to regulate the different types of social security funds investment law, or in the "social insurance law" in the "set up a special fund supervision" series of articles, absorb the beneficial experience USA "social security law" and other national legislation, a clear division of investment behavior of different types of social security funds, strictly prohibit the pillar 1 basic insurance fund investment stock, and the State shall provide directed to issue special national debt as an investment channel, and promote social security fund management, accept the supervision of public and participants, plug all kinds of system, the loopholes in management, in order to obtain the full attention and support Guang Daqun on social security. For the second pillar of enterprise annuity in the initial stage of the regulation should implement the restrictions on the number of rules, will gradually transition to the prudent man rule. For the third pillars of the commercial insurance and personal investment, should carry out the supervision in accordance with the commercial insurance regulation, to ensure open, fair, justice.

3According to the order, safety, profitability, liquidity to supervision

The social security fund social security function determines its investment principle with the order is: safety, profitability, liquidity, raise fund rate of return based on the guarantee of the safety of fund, at the same time ensure its liquidity needs. Fund safety is guaranteed pension to guarantee payment on time and in full and certain revenue commitments, this is the most fundamental principles of social insurance funds investment. As "the life of money," social security fund to safety as the investment principles first, means that the investment behavior should have the following characteristics: high security level must be forced to invest a certain proportion of the fixed income securities such as treasury bonds; for risk assets should be diversification to reduce risk; control risk is higher in the portfolio financial tools in the proportion of investment. The principle of the social security fund investment income is defined in accordance with the principle of safety conditions, fund investment should be on the principle of maximum profit. At the same time, the social security fund accumulation beneficiary may face replacement rate and inflation risk of due process, also asked the social security fund investment must consider the benefit principle. Liquidity principle of social insurance funds investment refers to the investment can be quickly financing, liquidity and turnover, to ensure the payment of the fund. In practice, to be prepared for a certain amount of cash or demand deposits, to ensure timely, full payment of the social security fund. If the funds for investment and freezing in some fixed project (especially some real estate projects) to cash, needs to be unable to cope with the payment of the fund, but also against the fund purpose.

4, establish the social security fund supervision departments independent

 

American classified regulation on different types of social security funds, regulators are relatively independent. Chinese existing social security fund supervision system, according to the 1999 January the State Council promulgated the "Provisional Regulations on collection and payment of social insurance premiums" (fifth) and "unemployed insurance byelaw" (third) set up. According to regulations, labor and social security departments at all levels actually taking the dual functions of management and supervision of social security fund, the social security fund supervision into labor and social security departments "self regulation". In view of this, should be the Ministry of labor and social security of the social security fund supervision, handed over to the independent regulation institution established, can also set up a special fund investment supervision departments in the original state Insurance Regulatory Commission, the Ministry of labor and social security has become a responsible for policy making, administration and supervision of the implementation of the national policy level institutions. It can enhance the social security fund management transparency, strengthen social supervision. Social supervision should be an important part of social security fund supervision system, but under the current system, the social security fund supervision to the administrative supervision, the public and the media are often not known fund raising and application status, this is local, departments or others misappropriation and diversion of the social security fund provides convenience. Therefore, independent of the social security fund supervision agencies or departments, should regularly publish the fund raising and application to the public actively, give full play to the supervisory role of the public and the media to the old-age insurance fund management.

 

5, under the existing conditions in the strict implementation of the existing government regulations

At present, the relevant legal investment management of social security fund in our country has not introduced, before the official law enforcement, to strictly enforce the existing government regulations, and increase the social security fund illegal, illegal, disciplinary efforts, and resolutely put an end to the social security fund managers have since internal theft, the strict distinction between the basic social insurance funds and pension funds that two funds, especially for the basic social insurance fund, to be strict, even harsh regulation, completely blocked pipeline various businessmen coveted social security fund. In the "block" social security fund illegal investment at the same time, but also a "sparse", from the national long-term strategic height to increase investment channels for social security fund legal, concrete measures is to learn from America specifically for Federal Social Security Fund issued special treasury practices, as Chinese young social security issue rate, the fund is the most favorable national debt, high safety, through the national credit guarantee fund investment. As it is, similar to the "Shanghai social corruption" is expected to reduce or even disappear, as people life of money of social security fund can safely preserve and increase the value, guarantee our future in a certain extent.

 

 

 

Notes.