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Integration not necessarily a 'sovereign fund'

The combination of the four major government funds does not necessarily have to be called a “sovereign fund,” said Chang Sheng-ford, Minister of Finance, yesterday.

Chang made the remarks during a hearing at the Legislative Yuan, following criticism for his earlier remarks that the ministry is not ruling out combining the four funds to form Taiwan's “sovereign fund,” which would be used to invest in a variety of products abroad.

The four funds — the labor pension fund, the labor insurance fund, the civil servants pension fund and the postal fund — are all made up of taxpayers' money and exist for the purpose of supporting laborers and civil servants after they retire. Several opposition legislators and segments of local media have said using that money to invest in foreign products is risky and irresponsible.

Escalating controversy has forced Premier Sean Chen, Chang's boss, to deny that the government was thinking about using the four funds to form a sovereign fund.

Yesterday at the Legislative Yuan, Chang was asked whether Chen's denial was like a “slap in the face” for him.

“Not really,” Chang replied. “But my remarks were taken out of context. The combination of the four funds does not necessarily have to be called a 'sovereign fund.'”

“My original intention was to raise the performance of those funds, which are invested in stocks,” he said. “When Taiwan stocks are doing poorly, we can combine those funds to invest in, for example, New Zealand's milk powder fund or Brazil's natural gas stocks.”

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