About the National Council for Social Security Fund
On August 1, 2000, the Central Committee of CPC and the State Council decided to establish the National Social Security Fund (NSSF) and the National Council for Social Security Fund (SSF) to manage and operate the assets of NSSF.
NSSF serves as the national social security reserve fund to supplement and adjust the social security spending such as social insurance during the peak time period of the aging of population. The funding sources of NSSF include fiscal allocation from the central government ,the transfer of state-owned capital and the fund investment proceeds, capital raised by other methods approved by the State Council.
SSF, a government agency at the ministerial level directly under the State Council of the People’s Republic of China, is responsible for the management and operation of NSSF.
With the approval of the State Council,SSF may take mandate from provincial government to manage social insurance fund.
SSF has been entrusted to manage three kinds of assets—Firstly, the NSSF ; Secondly, the subsidy from central government to enterprise employee’s basic pension individual accounts of some pilot provinces since the end of 2006; Thirdly, part of the surplus of the enterprise employee’s basic pension insurance for some provinces, including that of Guangdong Province since 2012 and Shandong Province since 2015.
Responsibilities of the SSF
◎To manage the capital allocated by the central government, the capital and equity assets derived from reduction or transfer of state-owned shares and capital raised by other methods;
◎To formulate and implement the investment operation strategies of NSSF;
◎To select and entrust investment managers and custodians of NSSF to manage and hold custody of the assets of the Fund, to examine the investment operation and custody of NSSF’s assets, and to directly engage in the investments of its assets to the extent permitted by rules and regulations;
◎To be responsible for the financial management and accounting of NSSF, to prepare periodic financial accounting statements, and to draft financial accounting reports;
◎To regularly disclose the financial condition such as NSSF’s assets, liabilities, equity and proceeds to the public;
◎To earmark funds in a way jointly instructed and designated by the Ministry of Finance and Ministry of Human Resources and Social Security;
◎To perform other duties assigned by the State Council.
Organization Structure-Non-Permanent Committees
According to the Charter of SSF, the SSF has three non-permanent committees, i.e., the Investment Committee, the Risk Management Committee and the Expert Appraisal Committee.
The Investment Committee is SSF’s investment decision-making body, which is composed of permanent members and non-permanent members.
The Investment Committee performs its duties by way of meetings and its main responsibilities are:
1.To analyze and judge the macro-economic situation and the developing trend of the capital markets, examine the strategic assets allocation plan and annual assets allocation plan, submit the plans to the Board for approval, and to examine and approve quarterly assets allocation plans;
2.To examine and approve NSSF’s investment benchmark and the judging criteria for NSSF’s major investments;
3.To examine and approve NSSF’s risk reports;
4.To examine and approve NSSF’s annual performance evaluation report;
5.To examine and approve the selection and dismissal schemes of investment managers and custodians, and to examine and approve the annual evaluation reports on investment managers and custodians and the special inspection reports proposed for consideration by the Chairman and the Vice Chairman in charge of the business;
6.To examine and approve the investment schemes of NSSF’s major investments; to examine and approve investment reports of project proposals and due diligence with respect to equity fund investments and direct equity investments, and reports of due diligence with respect to trust loans and of negotiations of certain project’s contracts;
7.To approve the investment schemes of new products and portfolio strategy adjustment;
8.To examine and approve other significant investment decisions.
The Investment Committee meetings include regular quarterly meetings and irregular day-to-day meetings. The resolutions of the meetings require a two-thirds majority vote by open ballot. The Chairman has veto power on the resolutions of the meetings.
The Risk Management Committee is SSF’s specialized proceeding body of risk management that is accountable to the Chairman. Its members include the Vice Chairman of SSF in charge of risk management, the Secretary-General and other staff of relevant departments who are responsible for risk management. The Vice Chairman of SSF in charge of risk management acts as the head of the committee and there is also a deputy head. The Risk Management Committee is authorized to invite other staff to be present at meetings or be questioned, and to invite external experts to be present to provide advice. Neither the invited staff nor the external experts are entitled to the right of voting.
The Risk Management Committee performs its duties by way of meetings. Its main functions are:
1.To examine and discuss the risk management regime of NSSF;
2.To examine and discuss the risk policies of NSSF;
3.To examine and approve NSSF’s risk governance including the reports of risk evaluation, internal control and inspections on crucial compliance matters;
4.To examine and discuss the judging criteria of major investment projects and major risks;
5.To examine and discuss major investments, major risks and risk management recommendations;
6.To examine and discuss the solutions for major risk events;
7.To receive regular analysis and assessment reports from the risk management-related departments on NSSF’s investment risks;
8.To organize on-site investigations of major investment projects and invested enterprises by relevant departments or members of the Risk Management Committee;
9.To perform other duties on risk management authorized by the Chairman of SSF.
The resolutions of the Risk Management Committee meetings require a two-third majority vote by open ballot and shall be examined and approved by the head of the Committee.
The Expert Appraisal Committee is established when SSF selects investment managers or custodians. The committee shall conduct the selection in accordance with the SSF’s assessment criterion and review procedures and propose a list of candidates for investment managers and custodians and submit the list to SSF for approval.
The SSF currently has eleven (11) departments and they are: the General Office, Asset Allocation & Research Department, Finance & Accounting Department, Equity & Fixed-Income Investment Department, Global Investment Department, Equity Management Department (also Industrial Investment Department), Legal & Compliance Department,Pension Management Department, Pension Accounting Department,Information Technology Department, Human Resources Department. In addition, there is a subordinate Administrative Service Center with its independent accounting unit.