Shanghai could be getting set to launch a commission to supervise its pension fund next month, according to local media reports.
Insiders said a commission plan had been submitted to the Shanghai Municipal Government for approval last month, whilst preparatory groundwork should be completed next month, according to the Shanghai-based China Business News.
The government news office refused to comment on the report, though no denial was made. No information is available on who might serve on the commission or how it will function.
Insiders said the commission could be made up of members of the standing committees of the municipal people's congress and people's political consultative conference with experts in the field also being involved.
The commission's remit would be overseeing the pension fund's management, ensuring its legitimacy and transparency.
Shanghai discovered in September that over 3 billion yuan (US$370 million) from its pension fund, concerning 12 million people, had been invested in highway construction and property deals.
By law, pension funds can only be invested as bank deposits or in national bonds or securities.
Several senior local officials and heads of large sate-owned enterprises were sacked and investigated in connection with the case, among them the then-Shanghai Party chief Chen Liangyu.
More scandals have emerged in recent months. Just last month a vice mayor of Jinhua, in Zhejiang Province, was sacked for misappropriating hundreds of millions yuan from the city's pension fund.
A report by the National Audit Office found that about 7.1 billion (US$887 million) of the 2 trillion yuan (US$250 billion) in the country's pension funds had been misappropriated.
To date, over 27 provinces are forming commissions to supervise their pension funds, with more planning to follow suit.
The state legislative body is drafting two laws meant to tighten oversight of the country's pension funds, according to a recent announcement by the Ministry of Labor and Social Security Bureau.
Shanghai released guidelines for the management of its pension fund last month. These emphasized strict and transparent management. Any government department or company involved with the city's fund must release income and balance reports with the fund also available for public oversight.
