NEWSGD.COM
Home | About Us | Contact Us | Site Map | Chinese
News | Biz | Pearl River Delta | Enjoy Life | Culture | Travelling | Pics | Cities & Towns | Gov Info | Specials
Home > News Brief > China
State moves to rein in wayward pension fun
Latest Updated by 2006-09-26 09:19:38
Related News
Policies aim to avoid corruption
3 documents issued to curb corruption among leading officials
Han Zheng becomes Shanghai's acting party chief
Hu Jintao calls on Party members to intensify anti-corruption efforts
China
State moves to rein in wayward pension fun
Appeals of death sentences to be heard in open court
China will not copy other countries in medical reform, MOH

China plans to centralize management of its poorly operated local pension funds as part of the government's effort to stamp out corruption and stem bad investments.

The Ministry of Labor and Social Security may issue rules in the first quarter next year that would take away management of provincial pensions from local governments, Chen Liang, a senior official at the agency, told reporters in a forum on Sunday.

The top watchdog for China's welfare system would instead implement a "market-based mechanism" and entrust the money to independent fund managers, Chen said.

China now has 230 billion yuan (US$28.8 billion) in national-level pensions under its social security system, mainly to fund living and medical expenses for the elderly and the poor.

The country also has about 100 billion yuan in local pension funds, mostly corporate annuities, that have been contributed by companies as employee retirement benefits apart from basic social security.

Provincial and municipal governments currently have the right to decide how those pensions are invested and usually don't employ professional asset managers or custodians.

As a result, a substantial portion of the money is held in investments such as real estate projects and long-term loans without public accountability and subject to low liquidity and high risks.

China's central government has recovered more than 16 billion yuan worth of misused national and provincial welfare funds since 1998, Liu Yongfu, a deputy minister of labor, said in April.

The country also is now conducting a nationwide audit of locally operated pension funds, ordering governments to clear up irregular investment and clamp down on misconduct.

To prevent administrative intervention, the National Council for Social Security, manager of the nation-level welfare money, has selected domestic and foreign-held fund ventures to help it arrange investments over the past two years.

For new corporate annuities, the labor ministry will allow fund managers, rather than local labor and social security bureaus, to take charge of the investments, according to Chen.

China needs to pay pensions for an estimated 200 million people who will retire by 2035, according to World Bank estimates. The pension gap is likely to be as large as 2.5 trillion yuan by then, according to industry analysts.

Regulators are working on a plan to give the national welfare pension fund special approval to trade bonds and invest in money markets abroad, said Xiang Huaicheng, head of the fund's manager, at an economic forum last week.

The welfare fund may invest between US$500 million and US$800 million in capital markets abroad in the fourth quarter, with Hong Kong likely to be the first stop.

Editor: Yan

By: Leo Zhang Source: Shanghai Daily web edition
Previous:    Next:Appeals of death sentences to be heard in open court


Volunteers make a splash for a cleaner beach


China Table Tennis Grand Prix kicks off in Guangzhou


Hengqin Stone Park in Zhuhai


Nuclear power plant to boost equipment manufacturing industry


"Jackass" kicks butt at box office
This site contains material from other media for content enrichment purpose only.
The Southcn.com website do not endorse such content and do not bear the joint responsibility of their copyright infringement.
The views expressed in written material posted to the bulletin boards of Southcn.com are those of the authors and/or publishers. The Southcn.com website does not endorse information products posted by organizations and individuals here. The originators of these information products are solely responsible for their content.
For copyright infringement issues, you shall contact Southcn.com within thirty (30) days. Email: falv@southcn.com
If you find any error in this page, please drag your mouse to mark the text with error, then press "CTRL" and "ENTER", to inform us. Thanks for your help!
Home  |  About Us  |   Contact Us  |  Site Map  |  Chinese
©2005 WWW.NEWSGD.COM. All rights reserved.registered number 020074 Terms of Use | Advertise | ICP Certificate No.B2-20050252
Guangdong Gov Link
Guangdong Gov Brief
State Structure
Guangdong in Brief
Laws & Regulations
Exchange Rate
Guangdong Guide
   
Museum Museum
University University
Eat Eat
Shopping Duting
Night Life Night Life
Weather Weather
Phone No. Phone Num
Consulate Consulate
Airport Airport
Travel Tips Tours Tips