China’s voluntary pension funds lose US$10.9 billion amid equity-market volatility, pointing to need for more investor choice

China’s voluntary employee pension funds reported a 2.8 per cent loss in the first quarter as bets on the stock market blew up amid a slump, highlighting the impact of market volatility and indicating a need for a more market-oriented fund-management approach as Beijing reforms its massive pension system.

An approach that gives individual investors more control over allocations in the so-called Pillar 2 pension scheme is a likely development, experts said. International financial institutions such as BlackRock are eyeing China’s large pension market, and fund managers will face pressure to improve their performance amid increasing competition, according to analysts.