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China to let corporate pension money go into bonds
2007-02-05
BEIJING - China is drafting rules to allow the managers of enterprise annuity schemes run by industrial companies to invest funds in the interbank bond market, a central bank official said in remarks published on Monday. Enterprise annuities are a recently introduced, voluntary corporate pension scheme similar to the 401k plans that dominate corporate retirement planning in United States. The plans were launched by China in a bid to supplement its grossly underfunded state-run pension system. The official Shanghai Securities News quoted Shen Bingxi, head of the financial market department at the People's Bank of China (PBOC), as saying the central bank was drawing up the rules with the labour ministry and would issue them soon. Two banks, Industrial and Commercial Bank of China and China Merchants Bank , have already been permitted to invest their pension funds in the interbank market, the newspaper said. The pair had invested 21.5 billion yuan ($2.8 billion) in total by the end of 2006, it said. The outstanding value of enterprise annuities in China was about 100 billion yuan at the end of last year, according to the paper. ($1=7.7600 yuan)
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