China's national pension fund has been entrusted with the management of local pension funds for south China's Guangdong Province.

After getting permission from the State Council, the Guangdong provincial government transferred 100 billion yuan ($16 billion) worth of funds to the National Council for Social Security Fund (NCSSF) for investment. And the two parties have signed a two-year agreement on March 19.

To maintain and increase the value of these local pension funds, the national pension fund will allocate more money to fixed-income products. The deal promises the Guangdong local pension fund a profit rate that's no less than the fix-term deposit rate.

By the end of 2011, China's local pension funds nationwide had totalled some 2 trillion yuan ($316 billion). As a result of inflationary factors, the fund has been devaluating for the last ten years. But since the establishment of the NCSSF 11 years ago, the total capital it has been responsible for has amounted to nearly 870 billion yuan ($137 billion), with an annual profit rate of over 8 percent, much higher than average consumer price index (CPI) growth.

The council has also conducted experimental management of individual fund accounts in the past five years, and it has registered a profit rate of over 10 percent.

(CNTV.cn March 21, 2012)