The State Council has published new rules on the social security fund.
It stipulates that China’s social security fund will supplement social security expenditures including pensions. The source of the fund includes central government revenues, state-owned capital and the fund’s investment returns.
The regulation also says that fixed-income assets and the stocks of listed and unlisted companies are eligible investments. The National Council for Social Security Fund will appoint professional institutions to manage the investments in an open and impartial manner.
“The social security fund is a reserve fund. The fund is not for immediate expenditures. It can be invested with a medium- and long-term perspective. Both yields and sustainability are important in its case. So there should be legislative and transparent rules on the fund’s raising, management and supervision,” said Zhagn Lianqi, managing partner of Ruihua Certified Public Accountants.