Personal pension system landing! How is it different from basic endowment insurance? How to invest? All you want to know is here
2022-04-22
The individual pension system was implemented as scheduled. According to the Chinese government website, on April 21, the general office of the State Council issued the opinions on promoting the development of individual pensions (hereinafter referred to as the opinions). The opinions put forward that in order to promote the construction of multi-level and multi pillar old-age insurance system, promote the sustainable development of the old-age insurance system, meet the growing diversified old-age insurance needs of the people, and promote the development of individual pensions suitable for China's national conditions, government policy support, individual voluntary participation and market-oriented operation, The scope of participation is workers who participate in the basic old-age insurance for urban employees or the basic old-age insurance for urban and rural residents within the territory of China. In the system mode, the individual pension adopts the individual account system, and the payment is fully borne by the participants and fully accumulated. Through the personal pension information management service platform, participants specify or open their own unique personal pension fund account for personal pension payment, income collection, payment and payment of personal income tax. The individual pension fund account is closed, and its rights and interests belong to the participants. Unless otherwise specified, it shall not be withdrawn in advance. In terms of receiving method, after reaching the age of receiving basic pension, participants can receive personal pension monthly, in several times or in one time, and the assets in the account can be inherited. On April 21, Zheng Bingwen, member of the National Committee of the Chinese people's Political Consultative Conference and director of the world social security research center of the Chinese Academy of Social Sciences, said in an interview with the Red Star News reporter that the biggest feature of individual pension, as the third pillar, compared with the other two pillars, is that it is not borne by the state and units, but by individuals. A complete accumulation system is implemented, and individuals fully enjoy the principal and income, similar to savings. Personal pension can provide pension security for flexible employees such as online car Hailing drivers and takeout boys. Important measures to deal with the aging population and realize the sustainable development of the old-age insurance system: Develop a multi-level and multi pillar old-age insurance system China has entered an aging society since 1999. The results of the seventh national census show that China's population aged 60 and over has reached 264 million, accounting for 18.70% of the total population, an increase of 5.44 percentage points over 2010; The dependency ratio of the elderly population in China was 19.70%, an increase of 7.80 percentage points over 2010. It is estimated that during the "fourteenth five year plan" period, China's elderly population aged 60 and above will account for more than 20%, and China will enter the stage of moderate aging from mild aging. At present, the income and expenditure pressure of social security fund is increasing. According to the financial development index report 2021 of various regions in China issued by the Institute of Finance and taxation of Renmin University of China in January, in 2018, the balance of urban employees' pension insurance fund in that year was 0.6 trillion yuan, including 0.53 trillion yuan of financial subsidies for enterprise employees' pension insurance. In 2020, the phased relief policy to deal with the impact of the epidemic was introduced. In that year, the urban employee pension insurance fund generated a revenue and expenditure gap of 0.7 trillion yuan, and the fund income included 0.63 trillion yuan of financial subsidies for enterprise employee pension insurance. Therefore, after deducting financial subsidies, the gap between pension insurance payment income and fund expenditure from the national total will reach 1.33 trillion yuan. Previously, the 23rd Meeting of the central comprehensive Deepening Reform Commission on December 17, 2021 considered and adopted the opinions on promoting the development of individual pensions. The meeting stressed that developing a multi-level and multi pillar old-age insurance system is an important measure to actively respond to the aging population and realize the sustainable development of the old-age insurance system. We should improve the system design, reasonably divide the pension responsibilities of the state, units and individuals, and provide institutional guarantee for individuals to accumulate pensions. Internationally, the three pillar pension system in which the state, units and individuals share the responsibility is generally selected. Zheng Bingwen, member of the CPPCC National Committee and director of the world social security research center of the Chinese Academy of Social Sciences, once estimated that by the end of 2020, the total scale of China's three pillar endowment insurance was about 8.8 trillion yuan, of which the first pillar basic endowment insurance (urban workers' basic endowment insurance and urban and rural residents' basic endowment insurance) fund was about 5.8 trillion yuan, accounting for about 6% of GDP; The second pillar, enterprise annuity and occupational annuity, is about 3 trillion yuan, accounting for about 3% of GDP; The third pillar endowment insurance fund is negligible. Expert: individuals fully enjoy the principal and income It has provided pension security for the majority of flexible employees At the central economic work conference held at the end of 2020, it was first proposed to "standardize the development of the third pillar old-age insurance". In 2021, this term first appeared in the government work report. Luo Xi, chairman of PICC group, said at the press conference of the State Council Information Office on March 2, 2021 that the third pillar endowment insurance has the following characteristics: first, it provides a channel and way for high-income individuals to provide for the elderly; Second, provide an old-age security for employees in emerging business forms and employees in various ways; Third, promote the healthy development of the capital market through long-term pension security funds. Zheng Bingwen said in an interview with red star news that as the third pillar, compared with the other two pillars, the biggest feature of personal pension is that it is not borne by the state and units, but by individuals. It implements the complete accumulation system, and individuals fully enjoy the principal and income, similar to savings. The basic old-age insurance adopts the system of individual account + overall planning fund. The overall planning part does not belong to individuals, but is taken away and redistributed by the state. Due to the limitation of ownership period, the enterprise (occupational) annuity is inclined to some employees. "In fact, China's enterprise (occupational) annuity coverage is not very wide, especially the self-employed enterprises with few people do not have the ability to establish, and the personal pension provides a choice for such enterprise employees. This provides pension security for the majority of flexible employees such as online car Hailing drivers and takeout boys. These people can choose the personal pension as a useful supplement to the basic pension insurance." The opinions put forward that the individual pension should be connected with the basic pension insurance and the annual pension of enterprises (occupations), realize the supplementary function of pension insurance, and coordinate the development of other individual commercial pension financial businesses. Zheng Bingwen pointed out that personal pension is mainly connected with enterprise (occupational) annuity. For example, after changing the employer, if the old employer has an annuity and the new employer has no annuity, it can be transferred to the individual pension account. The upper limit is temporarily 12000 yuan You can't invest in individual stocks and enjoy tax incentives The opinion stipulates that the upper limit of participants' annual payment of personal pension is tentatively set at 12000 yuan. Zheng Bingwen said that this is because individual pensions have tax incentives, which should be limited. He introduced that some other countries have upper limits, some have no upper limits, and some have to pay more fines. Zheng Bingwen pointed out that this amount actually comes from the upper limit specified in the pilot of individual tax deferred commercial endowment insurance in May 2018. Personal pension is version 2.0 of the pilot. In terms of investment, the opinions stipulates that the funds in the personal pension fund account are used to purchase financial products that meet the preferences of different investors and meet the requirements of safe, mature and stable operation, standardized target and long-term preservation, such as bank financial management, savings deposits, commercial endowment insurance and public funds, which can be selected by participants. Red Star News reporter noted that the investment object has no stocks. In this regard, Zheng Bingwen explained that we can only invest in the products of professional financial institutions, which is to establish a firewall in the policy system to prevent loss of capital and speculation. "It doesn't mean that there will be no fluctuations in individual pensions. Participants need to bear fluctuations and risks. This portfolio is completely selected by individuals according to their own preferences. Young people and the elderly may be different. At this time, intermediary consulting institutions can play a role." The Opinions also proposed that the state formulate preferential tax policies for individual pensions. Zheng Bingwen pointed out that this is the biggest difference between personal pension and other third pillar products. In addition to national policy support and tax preference, the state will also choose qualified product providers, institutional investors and qualified products, which need to be filed and approved, so they are more high-quality. Other third pillar products are being piloted Individual pension will be tried out for one year in some cities In May 2018, the pilot of individual tax deferred commercial endowment insurance was launched, which made it clear for the first time that premium expenditure can delay the payment of individual income tax, and the construction of the third pillar of endowment insurance in China officially kicked off. China also has other rich third pillar products in the pilot. In June 2021, the pilot of exclusive commercial endowment insurance was launched. In September, the pilot of pension financial products was officially launched. From March 1, 2022, the pilot area of exclusive commercial endowment insurance will be expanded to the whole country; On the basis of the original six pilot companies, pension insurance companies are allowed to participate in the pilot of exclusive commercial pension insurance; The pilot of pension financial products has been expanded from "four places and four institutions" to "ten places and ten institutions". In addition, the standardized management plan of individual consumption pension was also piloted in 2019. On March 25, the cbcirc website announced that it would continue to promote the development of commercial pension finance in an orderly manner. The pilot of pension savings is about to start, and the pilot of commercial pension plan mainly for low - and middle-income people is also being prepared. In addition, the national endowment insurance company officially approved for operation recently will focus on the development of innovative pension financial businesses such as pension annuity insurance, exclusive commercial pension insurance and commercial pension plans, and strive to meet the diversified pension security needs of the people. The implementation rules of individual pension need to be further implemented. The opinions proposed that it should be implemented step by step in combination with the actual situation, and some cities should be selected for Trial Implementation for one year, and then gradually promoted. In this regard, Zheng Bingwen suggested that the system needs to be pushed forward urgently. During the trial, we should pay attention to covering second tier cities and promote it to the whole country as soon as possible in one year. On the same day that the opinions were released, the CSRC issued a document on its official website. The release of the opinions established the basic institutional framework of China's third pillar endowment insurance. Pensions are long-term, normative and large-scale. By actively investing in the capital market, they can provide more long-term and stable development funds for the real economy. In the next step, the CSRC will speed up the formulation and introduction of supporting rules and systems for individual pension investment in public funds, and optimize the market environment for medium and long-term funds. (Xinhua News Agency)
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