It can be broken in 3 trillion years! The scale of annuity has entered a period of explosive growth

category:Finance
 It can be broken in 3 trillion years! The scale of annuity has entered a period of explosive growth


Li Lianren, chief pension trustee expert of Ping an endowment insurance, believes that Chinas annuity market will present eight major trends: larger market, higher treatment, wider investment, longer allocation, more choices, more flexible system, stricter management and better service.

The scale of annuity will exceed 3 trillion by the end of this year

According to the business data of the national enterprise annuity fund in the second quarter of 2020 disclosed by the Ministry of human resources and social security, by the end of the first half of 2020, the number of enterprises establishing enterprise annuity has reached 99700, covering 26.3686 million employees, and the accumulated fund scale has reached 1.98 trillion yuan.

In May 2004, in order to establish a multi-level old-age insurance system, the Trial Measures for enterprise annuity was formally implemented. This year is the 16th year of the implementation of the enterprise annuity system.

Compared with the end of 2019, the number of enterprises and the number of employees who have established the enterprise annuity system have increased by 1% and 3.49% respectively. From 2013 to 2018, the number of employees participating in the enterprise annuity in China has been hovering around 24 million, and nearly 900000 people will be increased in only half a year in 2020, which means that the expansion of enterprise annuity is speeding up.

Li Lianren recently said at the pension investment customer forum held by the company that it took 10 years for the enterprise annuity fund to achieve the first trillion yuan scale from 2007 to 2016. At present, the annuity scale has exceeded 2 trillion yuan, and it took about 4 years for the enterprise annuity fund to break through the trillion yuan in 2016 to realize the second trillion yuan. According to the current development rate, it is estimated that it will only take three years to realize the third trillion yuan.

He said that after a simple calculation, from the perspective of employee benefits, retirees who receive by stages will receive about 2000 yuan a month from the end of this year, which has a very obvious effect on the security of the elderly.

In addition to enterprise annuity, occupational pension, as a new force of the second pillar of the pension security system, also presents a rapid development momentum. At the end of February 2019, the first occupational pension fund in China was transferred to the trustee, marking the official start of the operation of occupational pension fund in China. Chinese reporters from securities companies have learned that by the end of the first half of this year, the scale of occupational pension fund has reached nearly 800 billion yuan, and is expected to exceed trillion yuan by the end of this year.

A person in charge of a large enterprise pension management company believes that with the rapid development of the annuity market, there will be several important changes in the future, including: investment will change from focusing on safety to paying more attention to profitability; entrusted management will change from investment supervision to asset allocation; investment scope will gradually expand; and product investment trend will be further accelerated.

The upper limit of annuity equity investment may rise to 40%

Chinese reporters from securities companies have learned that with the rapid development of the annuity market, the scope of annuity investment is expected to be further opened. This year, the Ministry of human resources and social security has solicited industry opinions on further liberalizing the scope of annuity investment. Compared with the current annuity investment policy, it plans to adjust the proportion of equity investment, overseas investment and non-standard investment, and relevant new policies are expected to be issued within this year.

The series of adjustments include: the upper limit of equity asset investment ratio is increased from 30% to 40%; annuity funds are allowed to invest in Hong Kong stock exchange standard stocks; new interbank deposit certificates, perpetual bonds, non-public directional debt financing instruments, asset-backed securities, asset-backed bills, treasury bonds, futures and treasury bonds, as well as policy and development bank bonds; and inclusion of preferred shares in the investment scope.

Li Lianren believes that the series of new policies will help annuity investment to consider asset allocation from a longer-term perspective, which may bring about a rise in long-term returns. For annuity fund, how to play the advantages of long-term funds and avoid short-term investment is very important. After calculation, if the annual income difference is 2 percentage points (7% vs 5%), the difference in funds after 30 years will be half (49.4%) He said.

Of course, more active long-term allocation, such as increasing equity assets, may increase short-term earnings volatility. Li Lianren believes that after observing the volatility of many pension funds in the world and paying attention to safety cushion, moderate fluctuation can bring better benefits.

For example, he said that the investment scope of social security fund, insurance fund and enterprise annuity are not the same, so it is difficult to simply compare the investment strategies of the three types of funds. However, from the perspective of investment performance in the past ten years from 2010 to 2019, the average return rate of insurance funds in recent ten years is 5.40%, enterprise annuity is 5.50%, and social security fund is 8.56%. From the perspective of volatility in recent ten years, the insurance fund, enterprise annuity and social security fund are 1.21%, 3.33% and 5.85% respectively.

The internal combination of enterprise annuity also shows similar differentiation. In terms of investment performance, in the first half of this year, the accumulated income of enterprise annuity reached 70.917 billion yuan, with a weighted average rate of return of 3.90%. Enterprise annuity portfolio can be divided into fixed income type and equity type according to whether it contains equity investment objects, and the weighted average return rate of portfolio with equity is higher. For example, in a single plan, the weighted average return of the portfolio with equity is 4.14%, that of the fixed income portfolio is 2.67%, and that of the portfolio with equity is 4.48% and that of the fixed income portfolio is 2.78%. In all the plans, the weighted average return of the portfolio with equity is 4.16%, and that of the fixed income portfolio is 2.70%.

With the increase of the scale of annuity fund, the problem of short-term assessment of long-term fund in the operation and management of annuity has also attracted the attention of many people in the industry. Some annuity clients pay more and more attention to the performance of the current quarter or even the current month, and link the ranking results with the allocation of funds.

Some people in the industry believe that annuity, as a pension, is a typical long-term allocation fund. If the assessment period is too short, it is easy to make investment in two situations: on the one hand, investment managers pay more attention to the short-term absolute income in asset allocation, and ignore the allocation of long-term high-quality assets of pension metal, so it is difficult to obtain long-term excess return. On the other hand, when the market fluctuates greatly, investment managers can only passively increase or reduce positions under the pressure of ranking, which brings challenges to the pension allocation and stable operation of value-added enterprises. Gan Weimin, Secretary of the Party committee, chairman and chief executive officer of Ping an endowment insurance company, put forward suggestions on whether the principal or agent of the annuity can learn from the operation experience of the social security fund on the assessment rules of enterprise annuity and occupational pension, and refer to the practice of the social security fund, appropriately relax the evaluation cycle of long-term performance, and appropriately relax the tolerance of performance fluctuation and withdrawal Limited assessment expands the depth of asset allocation and allocates relatively more equity assets to obtain higher long-term returns. Source: Securities Times editor in charge: Wang Wenhua_ NF5982

Some people in the industry believe that annuity, as a pension, is a typical long-term allocation fund. If the assessment period is too short, it is easy to make investment in two situations: on the one hand, investment managers pay more attention to the short-term absolute income in asset allocation, and ignore the allocation of long-term high-quality assets of pension metal, so it is difficult to obtain long-term excess return. On the other hand, when the market fluctuates greatly, investment managers can only passively increase or reduce positions under the pressure of ranking, which brings challenges to the pension allocation and stable operation of value-added enterprises.

Gan Weimin, Secretary of the Party committee, chairman and chief executive officer of Ping an endowment insurance company, put forward suggestions on whether the principal or agent of the annuity can learn from the operation experience of the social security fund on the assessment rules of enterprise annuity and occupational pension, and refer to the practice of the social security fund, appropriately relax the evaluation cycle of long-term performance, and appropriately relax the tolerance of performance fluctuation and withdrawal Limited assessment expands the depth of asset allocation and allocates relatively more equity assets to obtain higher long-term returns.