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China’s pension fund reaps 5.23% in investment return last year

Updated: Nov 27,2018 3:17 PM     Xinhua

BEIJING — China has for the first time disclosed the annual return of its basic pension fund investment, the Economic Information Daily reported on Nov 27.

Total return reached 8.78 billion yuan (about $1.2 billion) last year, with an annual return rate of 5.23 percent, according to new data released by the National Council for Social Security Fund (NCSSF).

This is the first time for the NCSSF to publicize its annual yield since local governments began entrusting the fund in December 2016 with running parts of their vast pool of pension assets for higher yields.

Locally-managed pension funds in China are traditionally stored in banks or used to purchase treasury bills with annual yields up to 2-3 percent, which were close to the so-called risk-free rate that is far below the market average and often depreciated due to inflation.

“The return was nearly two percentage points higher than the risk-free interest rate in the capital market within the same period and reflects the advantage of concentrated investment in the form of funds,” Guan Bo, a researcher with a government-run institute, told the newspaper.

NCSSF data also showed the basic pension fund had total assets worth 315.52 billion yuan by the end of last year, while outstanding liabilities stood at 33.62 billion yuan.