Let personal pension accounts truly come to life
2024-12-05
November 25th marks the second anniversary of the implementation of China's personal pension system. In the past two years, the market acceptance of the personal pension system has been continuously increasing, and smooth processes have been achieved from opening accounts, paying account fees, purchasing products to receiving funds. Data shows that in the past two years, the personal pension system has attracted over 60 million people to open accounts; In terms of product supply, over 800 products provide investors with diversified choices. Behind this, it not only reflects the gradual improvement of public awareness of elderly care, but also the attractiveness of the personal pension system. However, despite the higher than expected number of account openings, the deposit and investment situation of personal pension funds is not as ideal as expected, and there are problems such as "hot account opening and cold payment". According to the "China Pension Development Report 2023", after the implementation of the personal pension system, there are "three lows", specifically manifested as: the actual deposit ratio is relatively low compared to the number of account holders, only 22%; Compared to the maximum deposit amount of 12000 yuan stipulated by the tax preferential policy, the proportion of actual personal deposit amount is low, only 25%; The proportion of funds used for investment in the actual deposit amount is low, about 61%. Why is the personal pension system more eye-catching than attractive? Behind these "three lows" are investors' "lack of understanding", "distrust", and "inconvenience" towards the personal pension system. Personal pension is an important institutional design of the third pillar of China's pension insurance system. Encouraging more people to contribute to their personal pension is an urgent task to accelerate the development of a multi-level and multi pillar pension insurance system. As an important channel for participating in personal pension funds, commercial banks need to transform the "marketing war" of personal pension funds into a "service war", starting from solving the "three noes" and making personal pension accounts truly "live". The silence after opening a personal pension account is mainly due to the fact that many residents still lack a deep understanding and awareness of the personal pension system. When opening a personal pension account in the early stage, some users were mainly attracted by the bank's many preferential policies, rather than truly reserving for retirement. For some young people who have not yet formed a concept of retirement, the attractiveness of personal pension is relatively limited due to its long lock up period and strict receiving conditions. In response to the issue of users' lack of understanding of the personal pension system, commercial banks should strengthen the promotion of personal pension accounts, especially the advantages of the personal pension system in terms of personal income tax deduction and product safety, to enhance public awareness of the personal pension system; At the same time, it is necessary to strengthen education on elderly care finance, guide public awareness to shift from traditional reserve based elderly care to proactive and prudent investment based active elderly care, promote the transformation from savings based elderly care to investment based elderly care, and make more sufficient wealth reserves to actively respond to population aging. Diversified and stable income personal pension products are the key to increasing investors' trust in the personal pension system. At present, personal pension products are selected from existing financial products, and apart from the purchase conditions and tax incentives stipulated in the personal pension system, they have not formed significant differences or advantages with other personal commercial pension financial products. At the same time, personal pension products also face the risk of uncertain investment returns in market-oriented investments, and the unsatisfactory investment returns greatly reduce residents' enthusiasm for participation. Personal pension is not a one-time deal. After attracting users through preferential subsidies, financial institutions also need to provide continuous investment advisory and investment companionship services. On the one hand, commercial banks need to deeply explore the differentiated needs of customers, provide diversified and personalized investment consulting services based on the age, investment risk preferences, and holding funds of participants, and establish targeted personal pension plans for customers; On the other hand, we should strengthen the construction of investment research capabilities, innovate and develop high-quality inclusive elderly care products, so that individual pension products can truly play the dual advantages of "minimum guarantee+security", and bring tangible benefits and protection to investors. In addition to enhancing product attractiveness and improving the convenience of depositing and withdrawing personal pension funds, it is also an important part of increasing residents' willingness to participate in the personal pension system. According to regulations, personal pension fund accounts operate in a closed manner. Except in rare cases, personal pension can only be received after retirement, and the account is unique. Each person can only choose one bank to open one personal pension fund account at the same time, and cannot choose personal pension products across banks. For the issue of insufficient convenience in the personal pension system, relevant departments should further improve the design of the personal pension system, appropriately relax the conditions for receiving personal pension under effective control, better balance the principles and flexibility of the system, and improve the efficiency of account fund utilization; At the same time, we need to improve channel construction and create a national "shelf" for personal pension products, allowing investors to freely transfer accounts between different banks and purchase various personal pension products across banks. (New Society)
Edit:Yao jue Responsible editor:Xie Tunan
Source:Financial Times
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