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1st LD: China's pension fund seeks investment in stock market

Xinhua, June 29, 2015 Adjust font size:

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

An official draft guideline released on Monday gives the fund the greenlight 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 (around 500 billion U.S. dollars) 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. Endi