NCSSF to manage pension funds across seven Chinese provinces
Seven of China’s local governments, including Beijing and Shanghai, have agreed to hand over the management of their pension funds to the National Council for Social Security Fund (NCSSF) in an effort to increase investment diversification and improve yields, Wang Zhongmin, vice chairman of NCSSF, confirmed to local media, according to a report on Chinese news site china.org.cn.
This means that approximately 360 billion RMB (US$52.37 billion) will be transferred to the NCSSF for centralised asset management from local authorities, the Economic Information Daily reported. However, Mr. Wang told local media that the specific amount of available funds has not yet been decided on a local level.
With a majority of Chinese pension funds currently managed by local governments, the move is the country’s latest effort to improve on the low returns and address the problem of a rapidly ageing society.
The NCSSF, which oversees 1.9 trillion RMB in reserves for China’s Social Security Fund, has returned an average 8.82% a year since its establishment in 2000, according to it’s latest report. In 2015, the fund saw a return of 15% on its investments, which translated to 79 billion RMB.
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