"At present, the development of enterprise annuity faces great opportunities, ‘ Fourteenth Five-Year Plan ’ The plan has been clearly put forward ‘ Improve the coverage rate of enterprise annuity ’ . At the same time, the state will continue to promote the national overall planning of basic old-age insurance for employees, which will create a broader space for the future development of enterprise annuities. " Gan Weimin, secretary of the Party Committee and chairman of Ping An Pension Insurance Company, said at a seminar held in Beijing a few days ago that Ping An Pension Insurance participated in and witnessed the continuous growth of the scale of China’s enterprise annuity funds, the gradual expansion of the coverage population and the increasingly rich investment varieties, as the earliest annuity trustee in China and the first enterprise annuity plan in China.
Enterprise annuity is called the "second pillar" of providing for the aged. Relevant data show that by the end of the third quarter of this year, the accumulated fund scale of enterprise annuity in China has exceeded 3 trillion yuan. Experts said that establishing an enterprise annuity plan and deeply participating in the construction of China’s multi-level and multi-pillar old-age insurance system are important manifestations of enterprises’ active practice of social responsibility, and also help enterprises to carry out human resources management more efficiently.
The accumulated fund of enterprise annuity exceeds 3 trillion yuan.
The development of enterprise annuity in China has a long history. In 2004, the Trial Measures for Enterprise Annuity was issued, and the word enterprise annuity was formally put forward, which marked the official start of the market-oriented operation of enterprise annuity in China and opened the way for the standardized, professional and market-oriented operation of supplementary endowment insurance funds in China.
At present, the institutional framework of China’s multi-level and multi-pillar pension system has been completed. Statistics from the Ministry of Human Resources and Social Security show that by the end of the third quarter of 2023, the national accumulated enterprise annuity fund had reached 3,115.9 billion yuan, a fourfold increase compared with a decade ago, and 138,700 enterprises had established enterprise annuities, with the total number of employees exceeding 30 million.
According to the data of Ping An Pension Insurance, as of June 2023, the entrusted business of Ping An Pension Insurance annuity exceeded 700 billion yuan, and the entrusted service of annuity has covered 33 agents, 36 first-class central enterprises and nearly 28,000 enterprises in all provinces, cities and regions of China.
Since the beginning of this year, China’s investment market has fluctuated, but judging from the performance of enterprise annuity funds, in the first three quarters of 2023, the weighted average return rate of national enterprise annuity funds still achieved positive returns, with a return rate of 1.45%. More than one-third of the enterprise annuity fund portfolio returns are in the range of 1% to 2%. "Annuity fund investment has withstood the test of several ups and downs in the capital market, achieved the goal of maintaining and increasing value, and achieved many achievements." Gan Weimin said.
The attention of enterprise employees is rising.
Experts attending the meeting said that from the data point of view, in terms of investment return rate, the personal account accumulation model was adopted, and the weighted average investment return rate of enterprise annuity in the past decade was 6.35%; In terms of pension replacement rate, the current enterprise annuity can provide a replacement rate of more than 20% under the assumption of monthly installment.
As the first enterprise to establish an enterprise annuity plan in China and get the approval of the former Ministry of Labor and Social Affairs, Zhang Haochen, director of global employee welfare of Lenovo Group, introduced the new trend of employees’ understanding and recognition of enterprise annuity in recent years. With the increasing number of participants, the portraits of participating groups have also changed.
It is worth noting that Lenovo Group has created a variety of risk-preference investment portfolios in the operation of enterprise annuity. Therefore, Ping An Pension Insurance, on the basis of full investigation on the personnel structure of Lenovo Group, sets up investment portfolios with different risk characteristics under the plan to meet the diversified needs of employees, and selects the most suitable investment management institution for investment management under different investment strategies. At the same time, establish a differentiated investment performance comparison benchmark and a long-term investment assessment mechanism to ensure the long-term stability of planned investment operation.
In this regard, Zhang Haochen also talked about the increasing enthusiasm of employees to participate in annuity management. When the investment market fluctuates, employees will also be more inclined to express their opinions on investment choices. In order to adapt to Lenovo employees’ self-selection mode and help employees better understand their own risk preferences and portfolio characteristics, Ping An Pension Insurance cooperated with Lenovo Group to hold investor education seminars for employees on a regular basis. During the recent self-selection opening period, nearly 6,000 employees completed the portfolio conversion by themselves, and realized zero mistakes and zero complaints in self-selection work.
Experts are optimistic about the prospect of enterprise annuity expansion
Compared with the participation scale of urban workers’ basic endowment insurance, the coverage of enterprise annuity is not high at present. The third pillar of personal pension is still being promoted, and the national awareness of old-age care still needs to be stimulated.
From the perspective of social cognition, it is increasingly becoming a social consensus to develop a multi-level and multi-pillar pension system. According to a set of survey data shared by industry experts, 88.6% of the respondents believe that their future retirement income sources must include the national basic pension; 20% of the respondents believe that there is only a national pension; 24.8% of the respondents expect that their income after retirement will include enterprise annuity. In addition, the proportion of respondents who chose banking savings products, insurance products and securities products was 34.4%, 29.2% and 19.9% respectively.
Dong Keyong, secretary-general of the 50-member Forum on Pension Finance and professor of the School of Public Administration of China Renmin University, said that under the background of aging population, the full coverage, adequacy and sustainability that the pension system hopes to achieve can not be achieved only by pay-as-you-go or complete accumulation.
He believes that establishing an enterprise annuity plan and deeply participating in the construction of China’s multi-level and multi-pillar old-age insurance system are important manifestations of enterprises’ active practice of social responsibility and help enterprises to carry out human resources management more efficiently. Through the establishment of enterprise annuity plan, on the one hand, enterprises can enjoy preferential tax policies and enrich the employee welfare system at a relatively lower cost. On the other hand, it can effectively benefit the workers, help the employees of this enterprise to cope with the risk of fluctuation of the replacement rate of basic old-age insurance, and enhance the sense of acquisition, happiness and security of retired employees’ lives.
Gan Weimin said that Ping An Pension Insurance will continue to aim at "becoming the leading pension asset management institution in China", continuously improve its professional ability, accumulate management experience, strengthen its own entrusted management and risk control capacity system, and strive to create greater and more value for all clients, including Lenovo, and continuously contribute to the "peace force" for the future happy retirement of employees.