Diversifying investments could help social security fund grow

For the first time in recent years, the growth in income of the social security fund exceeded the growth in expenditure last year, according to the Ministry of Human Resources and Social Security. Beijing News commented on Tuesday:

It is progress that has proved hard to come by. Hopefully, it marks a turning point in the management of the fund.

On the one hand, it indicates that as long as the measures are appropriate and the supervision is effective, there is no need to be too pessimistic about the prospects for increasing the social security fund in both size and value in the future.

On the other hand, the government should be clear that the change comes from the rapid increase of the number of people paying social insurance. The authorities at various levels have stepped up their efforts, as is required by the central government, to collect the insurance from employers, who are in charge of paying the insurance for their employees according to the Labor Law, and the self-employed, so as to boost the coverage of the social security net.

The strict implementation of the Labor Law means much more private enterprises have fulfilled their lawfully bound duties to buy their employees social insurance.

Also, the government started investing the social security fund in some profitable private corporations through the stock market from 2015, which has proved to be a good source of income for the fund.

Although the government turned on the green light for investing by the fund in the late 1990s, most of the fund had been invested in State-owned enterprises for security reasons. But the revenue was limited.

The authorities can draw lessons from their investments and think of more profitable, but reliable and prudent means to make the fund grow.