China's local governments have entrusted more of their basic pension funds for more diverse, higher-return investments as the country tackles the challenge of an aging society, an official said Friday.

By the end of June, eight provincial-level regions had signed contracts to entrust a total of 410 billion yuan (about 61 billion U.S. dollars) in pension funds to the National Council for Social Security Fund (NCSSF), Lu Aihong with the the Ministry of Human Resources and Social Security told a press conference.

Of the total, 172.2 billion yuan of pension funds had been transferred for investment, with the rest to be in place in line with the contracts, Lu said.

The eight regions are the cities of Beijing and Shanghai, Henan, Hubei, Guangxi, Yunnan, Shaanxi and Anhui provinces. More regions will join at a later stage, according to Lu.

An evaluation system on investment performance will be established, while information transparency will be enhanced, Lu said.

He told reporters that the ministry will also study the possibility of investing urban and rural residents' social endowment insurance funds.

Pensions in China are traditionally held by banks or used to purchase treasury bills with 2 to 3 percent annual yields, which were far below the market average and were often depreciated due to inflation.

In contrast, the NCSSF earned an annual average return of over 8 percent on its investments over the past decade, by investing in a variety of financial products, including bonds and stocks.

China faces the challenge of building a more sustainable pension system as its population ages.

The country had 220 million people aged over 60 at the end of 2015, accounting for 16.1 percent of the total population.