Mar. 21, 2012 (China Knowledge) - The National Council for Social Security Fund (SSF)
, the manager of the country's National Social Security Fund (NSSF), said yesterday that it has received approval from the State Council to manage RMB 100 billion of pension funds for Guangdong
said in an online statement that would manage the funds for two years and would be more prudent in operating the funds.
The council also said that it will invest more of the funds in fixed-income products to ensure safe returns.
The central management of local pension funds is expected to help local governments out of massive pension deficits resulted from aging population as the RMB 1.92-trillion local pension funds are currently only parked into low-return instruments like bank deposits and government bonds. In addition, the move is part of the Chinese government's effort to boost the country's weak stock market.
Since the establishment of the NSSF in 2001, the pension fund has realized RMB 284.7 billion in investment income or an average annual return of 8.41%, 6 percentage points higher than the country's inflation rate.