(China Alert) Chinese pensions: Roadmap to NCSSF assets

-New guidelines make more Chinese pension assets more accessible
-Onshore NCSSF assets will soon be able to be invested overseas
-Asset managers are already making moves to win NCSSF mandates

Update: The first and most important step in giving offshore asset managers a larger slice of National Social Security Fund (NSSF) pension funds has just been completed. On Monday, State Council publicly released detailed guidelines for the development of the pension system with a seemingly minor but vital upgrade of NCSSF’s ability to make offshore allocations. This move not only lays groundwork for more of the RMB1.5tr (USD231bn) state pension reserve to be directed into overseas markets, but also creates a clearer path for NCSSF to take over management of greater portions of China’s RMB3.5tr (USD540bn) Provincial Pension Fund (PPF), fattening the pot that NCSSF can offer to third-party managers, onshore and off. Monday’s news forms only the first of a three-part regulatory effort to clarify NSSF and its manager, NCSSF’s, roles and centrality to China’s broader system. However, it provides sufficient impetus for Z-Ben Advisors to predict that more offshore mandates are likely to be offered by NSSF by the end of 2016, in larger sizes than have historically been made available.

State Council’s re-regulation of NSSF and NCSSF’s roles better defines…

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