Chinese Provinces Consider Entrusted Pension Investment

Three provinces and one autonomous region in China are planning to make an entrusted pension investment to handle the mounting payment pressure, according to Chinese state media.

Gansu, Zhejiang, and Jiangsu provinces, along with the Tibet Autonomous Region, are considering entrusting some of their 150 billion yuan ($23.05 billion) in total pension funds to the National Council for Social Security Fund (NCSSF) for professional investment.

The National Social Security Fund (NSSF) is China’s social security reserve fund, which is used 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, and capital raised by other methods approved by the State Council.

Tang Xiaoli, an official of the Ministry of Human Resources and Social Security, told Chinese state media that there is growing pension payment pressure due to the acceleration of economic restructuring, and an aging population, which requires new ways to support the funds’ value.

For more stories like this, sign up for the CIO Alert newsletter. 

So far, nine Chinese provinces have entrusted approximately 430 billion yuan ($66.08 billion) to the NCSSF for professional investment. Tang said China has about 4 trillion yuan in its pension fund balance, and that more provinces should be encouraged to use entrusted investment.

In November, the Chinese government announced plans to transfer part of the state’s assets into social security funds to help close the country’s growing pension gap. China’s State Council has said there is a shortfall in its basic pension system due to a longer deemed payable period than actual payable period. Under the asset transfer plan, the transfer proportion has initially been set at 10% of the state-owned shares, but the State Council said that might be adjusted considering the reform of the basic pension system, and requirements for sustainable development.

According to UN data, China’s working-age population of just over 1 billion will fall by 3 million to 6 million each year after 2021 to 952 million in 2030, and to 808 million in 2050. Additionally, China’s population aged 65 or older is expected to be 262 million, or 18.1% of the country’s population, in 2030, rising to 395 million, or more than 28% of the general population, in 2050.

Tags: China, National Council for Social Security Fund, Pension

Geetanjali Gupta

The New York Public Library (NYPL) has named Geetanjali Gupta, a senior vice president at Harvard University’s endowment, as its new CIO to manage the public library’s $1.2 billion in financial assets.

Gupta is the second executive to announce their departure from Harvard in recent days. Rich Hall, Harvard Management Company’s (HMC) head of private equity, announced he would leave in early February to become deputy CIO at University of Texas Investment Management Company (UTIMCO).

Gupta, whose first day on the job will be Feb. 26, replaces Todd Corbin, who stepped down at the end of February 2017 to become managing director at Summit Rock Advisors, a New York-based investment company. Michael Dardia, vice president for finance and assistant treasurer, helped manage the CIO responsibilities in the interim. Gupta will report to NYPL Chief Operating Officer Iris Weinshall, and will work with the library’s board of trustees’ investment committee.

“She is a proven and trusted investor, with demonstrated expertise of strong long-term portfolio performance,” said NPYL CEO Tony Marx in a statement. “We look forward to Geetanjali’s financial stewardship and to the ways her leadership will strengthen our ability to serve library communities for many years to come.”

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Prior to joining NYPL, Gupta was with the Harvard Management Company (HMC) in Boston for more than 11 years, most recently serving as the head of absolute return and public market funds. At HMC, Gupta helped manage portfolios valued at more than $15 billion across a diverse range of asset classes. Aside from a one-year stint at Goldman Sachs prior to attending graduate school, it will be the first time Gupta has left Harvard since her freshman year as an undergrad in 1996.

“I am thrilled to have the opportunity to join the leadership team at The New York Public Library,” said Gupta in a statement. “I hope to achieve excellent returns, build an outstanding investment team, and be an active leader.”

The CIO search committee was led by Dinakar Singh, the chair of the library’s board of trustees’ investment committee, as well as board of trustees chairman Evan Chesler, trustees Ray McGuire and Tony Yoseloff, and Weinshall.

“Our investment strategy must be robust and forward-thinking,” said Weinshall. “The New York Public Library will greatly benefit from Geetanjali’s thoughtful analysis, portfolio, and team management expertise.”

Gupta has a bachelor of arts degree in applied mathematics and economics, as well as master of business administration, and juris doctor degrees from Harvard Business School and Harvard Law School.

Tags: Geetanjali Gupta, Harvard, New York Public Library