Zhong Rongsa, vice president of Asset Management Association of China, said at the annual meeting of the 50th Anniversary of China Pension Finance Forum that “actively addressing” the aging of the population, we should not only “support” the elderly, that is, let the people have enough pension; It also needs to be “dependent” on the establishment of a pension system.
“Speaking of 20 years of experience in pension service in the fund industry, social security fund is indispensable. The social Security Fund was established in 2000. Three rounds of talent shows were conducted in 2002, 2004 and 2010 to select 18 investment managers, 16 of which are fund companies.” Zhong rongsa said at the meeting, “The social Security Fund comprehensively considers corporate governance, long-term investment performance, risk control ability, investment research team strength and other factors, and the selection criteria and assessment requirements for investment managers, reflecting its emphasis on the investment profession.”
We will give full play to the role of investment
Zhong rongsa pointed out that the pension “has to be supported”, should give full play to the role of investment management, and summed up the three contributions of investment income to the pension:
First, investment income has become an important part of the pension source. From the tens of billions of assets under management at the beginning of its establishment, by the end of 2019, the assets under management of the Social security Fund had exceeded 2.63 trillion, of which investment income accounted for nearly half, about 1.25 trillion.
Second, due to the absence of liquidity payment pressure, the investment returns are continuously rolled over and reinvested. Through the compound interest effect, an average annual investment return rate of 8.14% is achieved.
Third, the practice of the social Security Fund itself proves that only through professional investment structure and division of labor, strict investment discipline, and long-term philosophy, can we really get good returns.
“In the past 20 years, the social Security Fund has led the mutual growth of the fund industry, guided the value discovery of the capital market through continuous positive interaction, cultivated a group of professional institutional investors, and established a long-term and valuable investment culture. “Says Chung.
By the end of 2019, about 5.3 trillion yuan of pension funds had been invested, of which 2.4 trillion yuan was managed by the fund industry, according to the data.
In Zhong rongsa’s opinion, in terms of cultivating the investment concept of pension, one is to break the wrong idea of “protecting capital and high yield” as the investment target. Second, rooted in long-term philosophy, pension investment should focus on long-term maintenance and appreciation; The third is to support managers to carry out professional investment.
“In terms of investment and operation, first, individual options for pension investment should be established. In fact, some enterprises have experimented with individual options for enterprise annuity and achieved good results. Second, we should build a mature asset allocation system, where the trustee and the manager perform their respective duties, reasonably broaden the scope of investment, and make asset allocation give full play to its actual effect. Third, we will establish a market-oriented mechanism to attract more excellent investment managers from home and abroad to serve China’s pension investment, and let the market determine the winners and losers.” Chung points out.
How to improve the pension system
Zhong rongsa pointed out that in order to realize the pension “depend on”, it is necessary to comprehensively promote the construction of the individual pension system.
“The association’s efforts over the past five years have encountered many difficulties, but to its credit, we have so far reached the three most important consensus, and this consensus is based on professional rather than industrial interests.” “One is to stick to the account system, so that the tax deferral policy does not go to one type of product, but really benefits everyone,” Said Chung. Second, the public offering fund, a standardized financial instrument suitable for people’s financial management, will be brought into the scope of the third pillar of investment to provide people with high-quality products; The third is to keep the entrance open, so that everyone can participate in the investment of individual pension funds in various fund sales agencies according to their own habits and needs.”
Zhong rongsa called for the policy to be launched as soon as possible, so that everyone can choose their own investment method, choose their own manager or platform, and make good pension financial reserve and planning in a right environment.
Zhong also pointed out that to establish and improve the pension system, all parties should make persistent efforts in the following three aspects:
One is to do the right thing.
“From the global experience, the different positioning of various pension systems determines the differences in operating models. For example, the basic pension is in the pocket of the state and centrally managed, because it needs to ensure basic retirement living standards for citizens. As the pay-as-you-go system has the function of intergenerational payment, it requires the state to carry out overall management and investment.” “The third pillar is the most market-oriented pension system, as individuals take their own investment decisions and risks and accumulate funds in their personal accounts,” Zhong said.
Second, the promotion of the system should be improved in practice.
“The pension system is a big system involving the national economy and the people’s livelihood. It involves a wide range of issues, and inter-ministerial coordination is difficult to achieve. Although China’s enterprise annuity system has been developing slowly in the early stage, it has accumulated 1.8 trillion yuan in the past ten years. In the past two years, it has benefited from the increase of annuity payment ratio and the continuous improvement of the capital market, and the annuity market has been expanding continuously. “At the same time, I have accumulated valuable experience for the introduction of occupational pensions in China. Therefore, there is no perfect policy. We should introduce it as soon as possible on the basis of reaching consensus on the core issues and improve it in practice.”
Third, the long-term and sustained efforts of pension workers are needed.
“The work we do is recognized by a lot of fellow travelers and is becoming a reality. In this process, I am very touched, see we have the same ideal, these same serious man, to spend a lot of work, weekend time, discussed in various platforms up pension in this matter, to do research with great concentration, to do public welfare and charity heart to do the temporary looks into big, return is not a lot of things.” “Said Chung.