Diversifed Investment Plan to Boost Pension Fund Investment Return
Worries on the pension fund low investment return on the past years, China is now planning to introduce a diversified investment plan in hopes to boost the value. Any future investment of the fund will be diversified to avoid putting all finances in one place. All investment will include treasury bonds, bank deposits and project with good prospects.
A full play to the market mechanism will be implemented along with the help from professional investment agencies to hopefully avoid risk in investment. No other details were given id these agencies are foreign funded or domestic ones. Funds investment in big projects that have long term and stable investment return like big infrastructure to government subsidized housing.
Furthermore a low investment return of the fund for urban retirees coming from enterprises that pushed off operations in the 1990s has placed concerns as annualized investment yield is low and in the 2 percent mark in the past several years, thus falling short of the consumer price index which is a main gauge of inflation. Cash in the funds are now allowed for deposits in banks and for buying treasury bonds. All outstanding contributions into the China pension funds stand at 3 trillion yuan by the end of last year.