CHINA - The RMB211.79bn (US$26.7bn) National Council for Social Security Fund (SSF) has awarded its first overseas mandates totalling more than $1bn to 10 foreign fund managers.
T. Rowe Price and Janus Intech both won US equity mandates while Allianz, Invesco and UBS were said to have been appointed to manage Hong Kong equity mandates.
According to reports, AllianceBernstein, Axa Rosenberg Investment Management Asia Pacific and State Street Global Advisors were also brought on board by the SSF to invest in non-US equities.
Mandates for global bonds were awarded to BlackRock, AllianceBernstein and PIMCO while BlackRock was additionally appointed to manage the SSF's foreign currency cash position.
The fund had in June announced plans to invest in capital markets outside its domestic borders, and although specific details of each mandate have yet to be released, the SSF had said it aimed to invest a sum of "between $500m and $800m" in equities by year end, with an additional $100m to $300m in fixed-income products.
Xiang Huaicheng, the chairman of the SSF, was reported to have confirmed the mandates totalled more than $1bn, and added the agency planned to give more assets to the same managers to handle next year.
Established in 2000, the SSF was designed to tackle the problem of China's ageing society. It serves as a strategic reserve fund accumulated by the central government to support future social security expenditures.
According to the World Bank, in 2005, China had pension promises worth $1.6trn for which it had made no provision.
Earlier this month the International Monetary Fund slammed China's "decentralised, fragmented and inefficient" pension system saying it had strained local government's finances and was in need of urgent reform.
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.