□Chutian Metropolis Daily Jimu News reporter Liu Shan intern Wei Jiayi
In April this year, the “Opinions of the General Office of the State Council on Promoting the Development of Individual Pensions” (hereinafter referred to as the “Opinions”) were released, and it has been half a year since then. Jimu News reporter learned that in the past six months, many financial institutions have begun to deploy related businesses, and some banks have also launched an exclusive section for personal pensions in their official APPs, digging into the personal pension market.
What supporting policies are there for the personal pension system, what corresponding actions are financial institutions taking, and how should investors allocate their investments in the future? Jimu News reporters sorted out and interviewed relevant experts.
1
The upper limit of payment is 12,000 yuan per year
In April this year, the “Opinions on Promoting the Development of Individual Pensions” was officially released, which is considered to be a landmark event for my country to establish the third pillar of the old-age insurance system.
The “Opinions” make it clear that workers who participate in the basic endowment insurance for urban employees or the basic endowment insurance for urban and rural residents in China can participate in the individual pension system. The individual pension system adopts an individual account system, and the contributions are entirely borne by the participants and are fully accumulated. To put it simply, a person who participates in both social security and personal pension system can receive both social security pension and personal pension after reaching retirement age in the future.
After the release of the “Opinions”, all parties in the market responded enthusiastically, with various opinions. Dong Dengxin, director of the Institute of Finance and Securities at Wuhan University of Science and Technology, said that in the payment of personal pensions, people mainly misunderstand the following three aspects: account opening qualifications, funding sources and payment standards. Among them, the account holder of the individual pension account can only be the insured person of the basic pension insurance, but does not include the elderly who are receiving pensions, nor does it include infants and young people who are not working.
The source of funds for contributions to individual pension accounts can only be the employee’s current salary income (but not non-labor income), or the net business income of self-employed and self-employed persons, and only husband and wife can pay each other on behalf of each other. However, it shall not exceed the total contribution limit of both spouses. According to the existing documents, for those who are eligible to open an account, the maximum annual payment limit is 12,000 yuan, which can be paid in installments in the year or in one payment, but the latest payment deadline shall not be later than the “Annual Reconciliation of Individual Income Tax”. ”, which is June 30 of the following year.
“The payment standard of individual pensions in my country is appropriate and scientifically feasible.” Dong Dengxin believes that for 80% of middle- and low-income earners, only such a low-threshold and low-cost payment standard can be expected and feasible. Only then can they have the self-confidence and sense of achievement to actively participate. This is an inclusive institutional arrangement.
2
Investment income is not taxed for the time being
The “Opinions” make it clear that funds in individual pension fund accounts can be used to purchase financial products such as bank wealth management, savings deposits, commercial endowment insurance, and public funds that meet the regulations. Among them, the financial institutions and financial products participating in the operation of personal pensions are determined by the relevant financial regulatory authorities and released to the society through the information platform and financial industry platform.
On June 24, the China Securities Regulatory Commission issued the “Interim Provisions on the Management of Private Pension Investment in Public Offering Securities Investment Funds (Draft for Comment)”, which clarified the institutional arrangements for personal pension investment in public funds. This is considered a supporting policy to the “Opinions on Promoting the Development of Individual Pensions” issued by the State Council this year. The non-bank team of CICC released the latest opinion that on the product side, a total of 86 products were eligible for the preliminary screening.
Tax incentives for personal pensions have also attracted much attention. The State Council executive meeting held on September 26 pointed out that the development of personal pensions supported by policies and commercialized operations is conducive to better meeting the needs of the masses and improving the level of security. The meeting decided to implement individual income tax concessions for individual pensions supported by policies and commercialized operations, that is, pre-tax deductions will be made for contributors at the annual limit of 12,000 yuan, investment income will not be taxed for the time being, and the actual tax burden on receiving income will be reduced by 7.5%. 3%.
In this regard, Dong Dengxin said that this preferential tax policy is very beneficial to personal pensions, especially in the withdrawal link, the tax preference is very strong, far better than the current tax situation in the withdrawal link of enterprise annuity and occupational annuity.
3
Financial institutions have deployed
The development of the third pillar of pension is imminent, and the individual pension fund account is unique. Therefore, many financial institutions have begun to deploy.
On October 16th, a reporter from Jimu opened the Zheshang Bank APP and saw that there was a section on the homepage of “Personal Pension Account Opening Soon”. After clicking, it would enter the page of “Understanding Personal Pension in One Article”, which introduced the participation in details. Objects, participation forms, preferential policies, payment amount, how to open an account, investment scope, and collection methods.
In the China Merchants Bank APP, there is “pension finance” in the “Wealth” section. In addition to social security accounts, corporate annuities, and personal pension pages, the business currently shows: Personal applications are not open yet, and we will notify you as soon as possible after opening. . However, China Merchants Bank has launched a “reservation and courtesy” activity. After making an appointment, you can participate in the lottery. As of October 15, more than 28,500 people have participated in the appointment. China CITIC Bank launched the “Happiness + Pension Ledger” module in the APP to provide customers with basic pension insurance, enterprise annuity, occupational annuity, personal pension and post-retirement services and other related functions of the entire life cycle of pension.
In the semi-annual reports of many listed banks, they also disclosed their active participation in the pilot reform of individual pensions. According to the report of ICBC in the first half of the year, it will accelerate the promotion of the financial layout of the elderly, and actively explore the construction of the financial ecosystem for the elderly with key scenarios as the starting point. The bank has solidly promoted the personal pension business, actively developed personal pension investment products, and deeply participated in the construction of the national pension security system. Minsheng Bank’s 2022 semi-annual report disclosed that in terms of pension business, it closely focuses on the strategic layout of the national pension system, attaches great importance to the development of pension business such as enterprise annuity and occupational annuity, and actively deploys the third-pillar personal pension business.
4
Investing is different from a stock trading account
How personal pensions are invested and how to preserve their value may be the most interesting issues for all parties in the market. Dong Dengxin said that there are also the most misunderstandings in this regard. First, individual pension accounts cannot directly speculate in stocks. Some people mistakenly believe that personal pension accounts are equivalent to stock trading accounts for investors, and they can freely speculate in stocks or buy and sell other financial products. This is a big misunderstanding. An individual pension account is a closed account that has been accumulated for a long time. Funds can only be entered and cannot be used. Before retirement, they are not allowed to be used or withdrawn. There are only three exceptions: complete inability to work, living abroad or having other Comply with national regulations. Since most of the owners of individual pension accounts are not professional investors, and the funds in a single account are relatively small, in terms of account management costs and scale effects, a single account is not suitable for fighting alone. That is to say, individual pension accounts are different. For investors’ stock trading accounts, it does not allow “short-term speculation” or direct “stock speculation”.
Second, individual pension accounts have strict investment restrictions. Those who can finally be shortlisted in the scope of personal pension investment must be financial products with moderate risks and returns that are uniformly recognized by the China Securities Regulatory Commission and the Banking and Insurance Regulatory Commission.
Finally, many have questioned: Will personal pension investments lose money? Is it more cost-effective than individual stock trading? Facts have proved that the collective investment and long-term investment of individual pension accounts are capable of maintaining and increasing value. Because the average annualized rate of return of the national social security fund in the past 20 years has been as high as 8% or more, and the average annualized rate of return of the corporate annuity in the past 15 years has been as high as 7% or more, everyone has reason to believe that the long-term average annualized rate of return of all individual pension accounts If the rate reaches more than 5%, it should not be a problem.
Dong Dengxin introduced that at present, various financial institutions such as insurance, banks, and funds are accelerating the deployment of elderly customers according to their respective advantages, and increasing innovation in pension financial products. He believes that financial institutions not only need to improve their product R&D and business innovation capabilities, and reserve professional talents, but also need to improve their investment management capabilities, so that “the common people are willing to hand over their money bags to professional financial institutions.”