As pension funds will soon be permit- ted to invested in stock， the market is highly expectant that they will expand the source of funds in China’s A-share market. However， when it comes to pension funds， which are special in nature， safety should come first once they are invested in such markets. For China’s A-share market， the significance of pension funds lies in offering a new long-term and steady investment source， rather than merely a short-term market increase. In the mid and long term， the inclusion of pension funds will help alter investment behavior and patterns in the A-share market.
　　Since the second half of 2016， China’s A-share market has been sluggish， with trading volume， investor confidence and the speed of transactions at low levels. Against such a background， the entrance of pension funds is beyond doubt a stimulant. Some investors think this demonstrates support from the supervising authority to the A-share market and will increase stock market funds， helping the market to become bullish within a short time frame.
　　It is， however， unrealistic to expect pension funds to catalyze an A-share bullmarket in the near future. According to market estimations， of the total pension funds， about 300 billion yuan （$43.78 billion） will be allowed to enter the stock market， accounting for only 0.77 percent of the current circulated stock value in the market. Some experts think that this year， three to five provinces will entrust their pension funds to investment in securities， with dozens of billion yuan going to the A-share market at most.
　　The most important reason to allow pension funds to be invested in securities is to， through market-based methods， ensure and increase the value of the funds in a safe and controllable way. Pensions， unlike other types of funds， are depended upon by the elderly for survival. Rescuing the stock market is neither a function nor the responsibility of pension funds. Under any circumstances， the timing and scale of pension fund investments in the stock market must be based on the purpose of ensuring and increasing their value while guaranteeing their safety and mobility. During the decision-making process， safety must be considered as the top priority.
　　Most industrial insiders expect that in reality， pension funds will be less risktolerant than social security funds， while requiring higher mobility than the latter. Therefore， pension funds are most likely to be invested in large blue chips and industrial leaders. Considering the huge share capitals and market values of these stocks， it is unrealistic to expect the limited increased volume of funds to push up the overall valuation of the A-share market. In future investment practices， pension funds are unlikely to be used for speculations in the secondary market.
　　For these reasons， the most significant aspect of including pension funds in the A-share market is not how much money they will bring， or how many stocks will be purchased， but to demonstrate to investors that the A-share market is still of great value for investment， in order to boost investor confidence. On the other hand， the nature of pension funds determines that it’s a source of long-term investment. Pension funds will become a calming force to ensure market stability and guide capital toward long-term investment. This will curb speculation and boost long-term sound development of the A-share market， which has too many individual investors.