China has issued a draft regulation to better manage the country's 1.02 trillion yuan ($166 billion) pension fund.

The draft rules, which will solicit public opinion from Wednesday, will allow the fund to invest in both domestic and overseas capital markets. The proposed rules also state that the fund should be appropriately allocated to fixed-income assets, stocks and private equities approved by the State Council.

The draft is seen as the country's attempt to ensure adequate investment of the fund through legislative means.

Founded and managed by the National Council of Social Security Fund in 2000, the fund has achieved an annual investment return of 7.95 percent.

The draft also forbids any institutions or individuals to misappropriate or illegally invest in the fund and violators will be subjected to fines.