Investment is very important to maintain and increase the value of pension and to cope with the increasing pressure of basic pension income and expenditure.
According to the report data, in 2019, the equity investment income of the basic endowment insurance fund entrusted by the social security foundation is 66.386 billion yuan, with an investment return rate of 9.03%. Among them, the realized fair value of assets was RMB 43.354 billion, of which the realized return on assets was RMB 23.354 billion.
The yield of 9.03% significantly exceeded the social security foundations 2.56% in 2018 and 5.23% in 2017, setting a new high for many years. In fact, after the market-oriented operation, the return on investment of basic pension has made great progress compared with that before entrusted operation. According to the 2020 China pension finance development report released by the China pension finance 50 forum, since the end of 2016, the annual average return on investment of the basic endowment insurance fund has been 5.76%. However, the past data show that, in the years before the entrusted operation, the average yield of the basic endowment insurance fund for enterprise employees was always hovering in the range of 2% - 3% due to the investment basically being deposited in banks and buying Treasury bonds.
In 2015, the State Council officially issued the basic endowment insurance fund investment management measures, which stipulates that the pension fund shall be market-oriented investment operation. After the balance of pension funds in each province, autonomous region and municipality directly under the central government is settled and a certain payment fee is reserved, the specific investment amount is determined and entrusted to the institution authorized by the State Council for investment and operation. At the end of 2016, the social security foundation, which takes on the fiduciary role, selected 21 asset management institutions to serve as the securities investment management institutions of basic endowment insurance funds, including professional pension insurance companies, public fund companies, insurance asset management companies and securities companies.
Meanwhile, by the end of 2019, the total assets of the basic endowment insurance fund will be 1076.780 billion yuan. Among them, the direct investment assets are 405.401 billion yuan, accounting for 37.65% of the total assets of the basic endowment insurance fund; the entrusted investment assets are 671.379 billion yuan, accounting for 62.35% of the total assets of the basic endowment insurance fund.
In the report, the social security foundation said in the report that in 2019, it has done the following work to improve the funds investment and operation ability: promote the improvement of entrusted stock product system, increase the support of strategic emerging industries and technological innovation enterprises; grasp the rhythm of the bond market, continuously optimize the stock and incremental structure; strengthen the medium and long-term credit risk management of bank deposits; follow the national strategic guidance and increase the investment and operation capacity of the fund Investment in major national construction projects and the mixed reform of state-owned enterprises will support the development of the real economy, strengthen the management of fund liquidity at different levels, and improve the efficiency and income level of funds.
Which side is better for long-term capital investment?
Compared with the basic pension, social security fund, enterprise annuity and insurance fund are all long-term funds, although their sources and nature are slightly different. In 2019, which party has achieved a higher level of investment income?
However, the rate of return on investment of social security fund and pension fund is the highest in 2019, which is 3.06% and 8.03% respectively.
Comparing the investment strategies of social security fund and basic pension under improving fund investment and operation ability in their respective reports in 2019, the first financial reporter found that the two are roughly similar, but the strategies of social security fund include increasing private equity fund investment and strengthening overseas market tracking research, optimizing overseas investment structure and enriching overseas bond investment strategy, However, neither company disclosed the specific asset allocation of major categories.
Although the long-term stability is the investment goal of these long-term funds, but due to the different assessment cycle, it will also cause changes in investment decisions. For example, some enterprise annuity investors told the first finance and economics reporter that the current assessment period of annuity plan is one year or even shorter, which will unconsciously increase the short-sighted investment behavior of most pension investment managers, hoping to extend the assessment cycle of annuity investment performance compared with the three-year assessment period of social security fund.
However, if we make a longitudinal comparison over a longer period of time, in addition to insurance funds, the yields of pension funds in the fields of basic pension, enterprise annuity, social security fund and other pension financial categories generally reach a new high in recent years in the market recovery of 2019. In addition to the basic pension, the return on investment of enterprise annuity and social security fund in 2019 has reached a new high in nearly four years. According to the statistics of first finance and economics reporter, in 2018, when the capital market experienced turbulence, the rate of return of these funds inevitably declined compared with that in 2017. Among them, the negative investment return rate of social security fund was - 2.28%, and the investment return rate of enterprise annuity and basic pension also decreased to a large extent in this year. Although the rate of return on investment obtained by insurance funds in 2019 is lower than that of other types of funds, the volatility of investment return rate in recent three years is the smallest. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931
According to the statistics of first finance and economics reporter, in 2018, when the capital market experienced turbulence, the rate of return of these funds inevitably declined compared with that in 2017. Among them, the negative investment return rate of social security fund was - 2.28%, and the investment return rate of enterprise annuity and basic pension also decreased to a large extent in this year. Although the rate of return on investment obtained by insurance funds in 2019 is lower than that of other types of funds, the volatility of investment return rate in recent three years is the smallest.