CHINA will allow its pension funds to tap into riskier asset investments once top policymakers approve the plan, a senior official said Friday.

    The draft plan, supported by a majority of the public, would allow the country’s basic pension funds to be invested in new channels, including domestic stock markets, but cap the maximum proportion of investment in stocks and equities at 30 percent of the funds’ total net assets.

    Li Zhong, spokesman for the Ministry of Human Resources and Social Security, said the government had received mixed public feedback about allowing pension funds to invest in riskier assets.

    Nearly a third of more than 1,000 members of the public who gave their feedback felt that retirement funds should not be invested in risky and volatile assets, he said. In contrast, around 61 percent of respondents supported such investments, Li said, without disclosing the government’s position on the issue.

    After revisions, the draft will be submitted to the State Council, or Cabinet, for a final decision, Li said.

    Absolute safety must be guaranteed in pension fund investments, he said, so the government will entrust institutions to handle the investments and let them determine the timing and preliminary volume of investment once the plan is approved.

    Li said investment managers who broke rules while losing money investing on the behalf of the pension fund could be liable for the losses. He said investment managers may be asked to pay 1 percent of their annual net income into a reserve fund that will be used to cover potential damages.

    According to Li, the basic pension funds have assets of around 2 trillion yuan (US$326.8 billion) that could be invested, meaning up to 600 billion yuan could theoretically go into the stock market when the draft plan comes into effect.

    (SD-Xinhua)