Shanghai could be getting set to launch a commission to
supervise its pension fund next month, according to local media
reports.
Insiders said a commission plan had been submitted to the
Shanghai Municipal Government for approval last month, whilst
preparatory groundwork should be completed next month, according to
the Shanghai-based China Business News.
The government news office refused to comment on the report,
though no denial was made. No information is available on who might
serve on the commission or how it will function.
Insiders said the commission could be made up of members of the
standing committees of the municipal people's congress and people's
political consultative conference with experts in the field also
being involved.
The commission's remit would be overseeing the pension fund's
management, ensuring its legitimacy and transparency.
Shanghai discovered in September that over 3 billion yuan
(US$370 million) from its pension fund, concerning 12 million
people, had been invested in highway construction and property
deals.
By law, pension funds can only be invested as bank deposits or
in national bonds or securities.
Several senior local officials and heads of large sate-owned
enterprises were sacked and investigated in connection with the
case, among them the then-Shanghai Party chief Chen Liangyu.
More scandals have emerged in recent months. Just last month a
vice mayor of Jinhua, in Zhejiang Province, was sacked for
misappropriating hundreds of millions yuan from the city's pension
fund.
A report by the National Audit Office found that about 7.1
billion (US$887 million) of the 2 trillion yuan (US$250 billion) in
the country's pension funds had been misappropriated.
To date, over 27 provinces are forming commissions to supervise
their pension funds, with more planning to follow suit.
The state legislative body is drafting two laws meant to tighten
oversight of the country's pension funds, according to a recent
announcement by the Ministry of Labor and Social Security
Bureau.
Shanghai released guidelines for the management of its pension
fund last month. These emphasized strict and transparent
management. Any government department or company involved with the
city's fund must release income and balance reports with the fund
also available for public oversight.
(China Daily December 7, 2006)