The Chinese government is considering diversifying investment of
its pension insurance fund to supplement its pension accounts by
improving returns.
The Information Times reported on Wednesday that by the
end of last year, the balance of China's pension account was just
480 billion yuan (63.16 billion U.S. dollars), while it needed 900
billion yuan to have a full coverage.
The Ministry of Labour and Social Security (MOLSS) and the
Ministry of Finance jointly drafted management measures governing
investment by the fund of individual pension accounts, allowing the
fund to invest in more areas than before.
The pension insurance fund mainly deposits its capital in large
commercial banks, with some invested in long-term projects with
moderate returns, such as expressways and railways.
Under the new policy, the fund will be able to enter the bond
market or even buy mutual funds, the report says, so as to increase
investment returns. In addition, professional institutions will be
selected to manage individual pension accounts.
In addition to social and commercial pension insurance, the
government encourages enterprises to solve retirement problems with
corporate pensions, according to the report.
Over the past few years, the profit rate of the pension
insurance fund was 2.18 percent, but the weighted inflation rate
was 2.22 percent, indicating an actual depreciation of the fund,
according to statistics from the MOLSS.
(Xinhua News Agency August 30, 2007)
