More than 600 million yuan worth of Guangzhou pension funds -- that had been invested in commercial operations -- cannot be recovered.
That was the message that Cui Renquan, director of the Guangzhou labor and social security bureau, delivered to an investigative group from the Standing Committee of the Guangdong Provincial People's Congress on Monday.
Cui described the disappearance of the pension fund as a problem left over from the mid-1990s.
A document issued in 1993 by the then Ministry of Labor encouraged officials to transfer a portion of their pension funds to social credit agencies for investment. Accordingly, the pension fund company affiliated with Cui's bureau invested some of their funds.
But the following year the ministries of labor and finance jointly issued a new document banning the investment of pension funds on the open market and demanding that money withdrawn from pension funds for commercial operations be recovered.
In 1998, a total of 1 billion yuan of pension funds were still tied up in commercial operations and could not be recovered, according to Cui.
In 2000, Guangzhou set up a special office tasked with recovering pension funds, with a deputy mayor in charge. It also set aside 50 million yuan in a reserve fund to offset possible losses.
A court ruling has now been made and is being implemented in 19 cases involving 813 million yuan, 90 percent of the funds tied up in commercial operations.
The National Audit Office audited the misuse of the pension fund last year but their conclusions are not known.
Mayor Zhang Guangning's remark might give some clues to the answer.
"If the pension fund cannot be recovered, the Guangzhou city government will follow the recommendation of the National Audit Office and use the reserve fund to make up the shortfall," Mayor Zhang was quoted as saying.
(Xinhua News Agency April 5, 2007)