China wants to strengthen its
pension system to meet the demographic challenge of a shrinking
working-age population. Photo: Reuters
The
State Council has approved plans for the manager of the mainland's
biggest pension fund to manage pension funds worth about 2 trillion yuan
(HK$2.5 trillion) for local authorities, two industry sources said.
The mainland is trying to strengthen its pension system to meet the huge demographic challenge of an already-shrinking working-age population as it looks to turn the economy into one driven by consumption and services rather than investment and exports.
The move for the National Social Security Fund (NSSF) to manage and invest more pension funds on behalf of provincial authorities could benefit the stock market, which has fallen 20 per cent over the last two weeks.
"The plan has been approved by the State Council, the size could be around 2 trillion yuan," said one source, adding that the stock slide might have hastened the approval decision.
NSSF officials did not respond to requests for comment.
The NSSF has been managing pension funds worth about 100 billon yuan for Guangdong since 2012, with a cumulative investment return of 17.3 billion yuan, according to the fund's annual report.
The NSSF, which had total assets of about 1.5 trillion yuan at the end of last year, posted a return on investment of 11.43 per cent in 2014, up from 6.2 per cent in 2013 and 7 percent in 2012.
In April, Beijing said it was expanding the investment scope of the social security fund to allow it to buy more local government debt, investment trusts and shares in state-owned companies.
The mainland is trying to strengthen its pension system to meet the huge demographic challenge of an already-shrinking working-age population as it looks to turn the economy into one driven by consumption and services rather than investment and exports.
The move for the National Social Security Fund (NSSF) to manage and invest more pension funds on behalf of provincial authorities could benefit the stock market, which has fallen 20 per cent over the last two weeks.
"The plan has been approved by the State Council, the size could be around 2 trillion yuan," said one source, adding that the stock slide might have hastened the approval decision.
NSSF officials did not respond to requests for comment.
The NSSF has been managing pension funds worth about 100 billon yuan for Guangdong since 2012, with a cumulative investment return of 17.3 billion yuan, according to the fund's annual report.
The NSSF, which had total assets of about 1.5 trillion yuan at the end of last year, posted a return on investment of 11.43 per cent in 2014, up from 6.2 per cent in 2013 and 7 percent in 2012.
In April, Beijing said it was expanding the investment scope of the social security fund to allow it to buy more local government debt, investment trusts and shares in state-owned companies.
This article appeared in the South China Morning Post print edition as NSSF to manage 2tr yuan in local funds
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