CRI听力:Official: Safety a Priority if Pension Fund Allowed to Buy Stocks

Li Zhong, spokesman for the Ministry of Human Resources and Social Security, said on Friday that the pension fund will tap into riskier asset investments once top policymakers give the nod.

The remarks come nearly one month after the country issued a draft guideline to widen investment channels for the fund.

It stipulates no more than 30 percent of the fund's total net assets could be invested in stocks and equities.

The official says opinions have been invited among more than 1,000 people about the plan. More than half of them were in favor of the plan.

"Sixty-one percent of voters supported allowing pension funds to invest in the stock market, while 31 percent opposed the proposal. Eight percent of voters chose the not relavent option."

According to Li Zhong, the fund currently has assets of around 2 trillion yuan that could be invested.

That means up to 600 billion yuan could go into the stock markets if the plan comes into effect.

Li notes that absolute safety must be guaranteed.

"Pension funds are regarded as the 'lifeline' for retirees. Absolute safety of the pension funds must be guaranteed as our primary consideration."

In China, urban employees pay for their pension before retirement and usually get a pension equal to about half of their previous salary.

Figures from the ministry show that outstanding contributions to the fund stood at 3.06 trillion yuan at the end of 2014, while money placed in the fund accounts for roughly 90 percent of the country's total social security fund pool.

But its investments have been limited to low-yielding bank deposits and treasury bonds.

An estimate from Chinese Academy of Social Sciences said the country's pension fund depreciated by nearly 100 billion yuan in the past 20 years, taking inflation into account.

Calls for higher investment returns have grown louder in the face of the country's aging population.

Li Zhong adds that professional institutions will help handle the investments and a diverse portfolio will be designed to offset possible stock losses.

"Pension funds have a diverse portfolio so we should not regard the possible losses in the stock market as the overall losses of the fund assets. There are more than 20 products for pension fund investment. We can divide the assets into safe assets and risk assets based on the risks involved."

Li says the draft will be submitted to the State Council, or the cabinet, for a final decision.

According to the draft plan, the fund may also be invested in government and corporate bonds, major national construction projects and leading state-owned enterprises.

For CRI, I'm Luo Wen.