Pension fund set to invest in A shares

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June 30, 2015

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Pension fund set to invest in A shares

Source: Xinhua | June 30, 2015, Tuesday |

Print Edition

China’s pension fund is likely to be allowed to invest in the A-share market, according to central authorities.

An official draft guideline released yesterday gives the fund the green light to invest in the stock market but restricts the maximum proportion of investment in stocks and equities at 30 percent of total net assets.

The move is to improve investment management and supervision of the social security fund and diversify investment channels.

In China, urban employees pay for their pension before retirement and usually get a pension equal to about half of their previous salary. Outstanding contributions to the fund stood at 3.06 trillion yuan (US$493 billion) at the end of 2014.

However, money in the fund, roughly 90 percent of the country’s total social security fund pool, was previously only deposited in banks or invested in treasury bonds, which has been strongly criticized due to rigid management and low returns.

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Pension fund set to invest in A shares

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