China has approved the country's first group of pension target funds, allowing mutual funds to play a bigger role in meeting the retirement planning needs of an aging population.

Fourteen fund management firms, including China Southern Asset Management Co., Ltd. and China Asset Management Co., Ltd., have obtained approvals for issuing such funds.

Pension target funds are mutual funds that encourage long-term holding by investors, adopt mature asset allocation strategies, and control the risk of volatility to seek long-term, stable returns on retirement savings.

Currently, China's retirement plans mostly rely on state- and corporate-sponsored programs. The country is looking to develop pension target funds, part of individual retirement plans, to complement the system amid pressure from the aging society.

The number of people aged 60 or above reached 241 million in China by the end of 2017, accounting for 17.3 percent of the total population. The number is expected to peak at 487 million in 2050, counting for a third of the total population, according to the Office of the National Working Commission on Aging. 

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