CRI听力:China to Boost Value of Pension Fund

Social Security minister Yin Weimin says potential changes to the pension fund investment program are going to be submitted to the NPC Standing Committee later this year.

"Our first priority is to allow market to manage pensions. The fund will be run by professional investment agencies based on market rules. Secondly, we want to diversify investment channels. Apart from buying treasury bonds and bank investments, we plan to choose projects which we feel have good financial prospects. In saying that, we are going to pay particular attention to try to avoid risks. Only a certain part of the pension fund will be allocated toward stock market investment."

Under the current rules, money held by the government in the pension fund can only be invested in treasury bonds and bank deposits.

This has only produced an annualized investment yield of around 2-percent for the past few years, meaning the pension fund has been losing money, as its yield has been below the rate of inflation.

Yin says the new investment plan is designed to boost the value of the pension funds.

Apart from that, Human Resources vice-Minister Hu Xiaoyi says that even when in deficit, the pension funds for Party Staff and government employees will not eat into the funds for enterprise employees.

"Pensions for Party Staff and public institutions are funded by the public finance. Their pension funds are operated independently and are not mixed with pension funds for enterprise employees."

Under the old, dual-track pension system, company employees were required to contribute 8-percent of their monthly salary to the pension system.

Government employees had been exempt from this, with pensions dolled out after retirement without making any contribution at all.

This was known as the "iron rice bowl," which made government jobs much more appealing.

Earlier this year, the State Council announced a reform plan to unify the dual-track system.

Government and public institution staff are now required to be brought under the same pension system as company employees.

For CRI, I'm Qi Zhi.