(ECNS) – China will release a plan as soon as this week that will allow pension funds to be invested in the country's stock market, China Business News reported on Monday, citing sources close to the Ministry of Human Resources and Social Security.
Up to 30 percent of pension funds are likely to be freed up for investment in the stock market, and the National Council for Social Security Fund may take the helm for such investments, the paper said.
The ministry has made no comment on the matter.
Zheng Bingwen, director of the World Social Security Studies Center at the Chinese Academy of Social Sciences, told the paper that the move will help maintain and increase the value of trillions in pension funds.
The plans are likely to be released soon, but implementation will take some time, Zheng said.
A notice posted on the ministry's website on June 26 said a press conference on China's social security development will be held this Tuesday, at which more details about the plan could be released, the paper said.
Pension funds account for about 90 percent of China's total social security funds. According to official statistics, China's urban and rural pension funds amounted to 3.5 trillion yuan ($563.65 billion) at the end of last year. They face a severe depreciation risk, however, as they only earn interest at an annual rate of two percent.
