Pension funds’ Asset Allocation and Population Ageing Issue
Population ageing issue is an urgent demographic and social security problem for Chinese regulators. It links the status of the pension system to the strategic asset allocation and investment policies for the Chinese pension system andgives them incentives to change the proportion of equity investment. By comparing the different pension systems in China, United Kingdom, United State, Japan and some other OECD countries, I find that Chinese pension system determines the strategic asset allocation on the status of the pension system and the investment policy. The more elderlypeople covered by the pension system, the fewer proportion regulators invest in the equity investment; however, the decreasing long-term interest rate leads to the higher proportion of equity investment for the pension system. The findings proof that population ageing issue and the scale of retired participant have impacts on the risk-taking of the Chinese pension systemand the decline of long-term interest rate gives an incentive for the pension system to increase the equity exposure.