① In order to implement it nationwide, some banks have indicated that they have made various preparations. Until now, they have continued to do related work such as employee training, and have also completed system tests for the full opening of the doors. ② If individual pensions are fully implemented, it is expected to drive up the scale of individual pensions, or bring incremental capital to the market.
Financial Services Association, January 30 (Reporter Gao Ping) Recently, the Ministry of Human Resources and Social Security said that the personal pension system that was first implemented in 36 cities and regions is currently running smoothly. The next step will be to promote the full implementation of the personal pension system. A reporter from the Financial Services Association learned that for the full implementation of the personal pension system, banks have already begun active preparations to “race the horse” by opening accounts in advance, etc. At the same time, for nationwide implementation, some banks have indicated that they have made various preparations. Until now, they have continued to do relevant work such as employee training, and have also completed system tests for the full opening of the doors.
Industry insiders told the Financial Federation reporter that if personal pensions are fully implemented, it is expected to drive up the size of personal pensions, and may bring incremental capital to the market. By 2030, the size of personal pensions may reach 1.45 trillion yuan, which is expected to bring incremental capital of 0.63 trillion yuan and 0.15 trillion yuan to banks and bank financial managers.
Pre-opening an account increases the bank's “Happy Horse Zone”
“In the pilot regions, we have been actively promoting personal pension account opening for the past few years.” The financial manager of a stock bank told the Financial Association reporter on January 29 that the bank currently has activities related to personal pensions, such as account opening gifts, deposit gifts, and random sampling of cash red envelopes. Another stock bank staff explained that in terms of account services, the bank provides personal pension account opening, deposit, and certificate inquiry functions to provide customers with a full perspective account management service. At the same time, it optimizes the account opening process and value-added services, and introduces functions such as personal pension deposit certificate inquiry, download, and pre-opening an account.
Referring to pre-opening accounts, the Financial Services Association reporter learned that in non-pilot regions, banks are also attracting customers to make appointments to open accounts through raffles and other activities to “expand their horizons.” Staff at the Shandong branch of a major bank told CFC reporters that from 9:00 on January 5, 2024 to 24:00 on March 31, 2024, individual customers of the bank's Shandong branch (excluding Qingdao) who successfully applied for a personal pension account reservation and opening business can participate in the account opening lottery. Staff from another stock bank explained that the bank makes an appointment to open a personal pension account and enjoy the rewards campaign period from now until February 28, 2024.
In fact, before that, quite a few banks had already launched account opening activities in non-pilot regions to prepare for full implementation in advance. For example, according to a WeChat account article on the “Personal Pension Non-Pilot City Account Reservation Lottery” published earlier by CCB, the current pilot cities for personal pensions include cities and regions such as Beijing, Shanghai, and Suzhou. If not in these cities, you can participate in the bank's non-pilot city pension reservation account opening activities, and you can also receive WeChat instant savings. At the time, it was shown that the event period was from June 1, 2023 to November 30, 2023. On January 29, the bank's customer service staff told CFA reporters that at present, the bank has successfully booked a courtesy event related to opening a personal pension account for the first time until March 1, 2024.
Meanwhile, the Financial Services Association reporter learned that some banks are already making more related preparations for the nationwide expansion of personal pensions. A relevant person in charge of a branch of a major bank in Guangzhou told CFA reporters that with regard to the nationwide expansion of personal pensions, the bank has made various preparations, including training employees, in-depth understanding of systems, policies, and business services; completing system preparations, and completing system testing for the full opening of the system. In addition, we will continue to enrich the personal pension product line, etc.
The scale of personal pensions is expected to rise to bring incremental capital to banks, financial planners, etc.
On November 25, 2022, China's personal pension system was officially implemented. 36 cities and regions, including Beijing, Tianjin, Hangzhou, and Guangzhou, took the lead. As of January 26, 2024, there were a total of 726 personal pension products in China, including 465 savings products, 180 fund products, 58 insurance products, and 23 financial management products, mainly involving banks, bank financial managers, funds, insurance and other financial institutions.
Furthermore, the data shows that the number of account holders currently exceeds 50 million. According to the industry, there is still plenty of room for growth, and the full implementation of personal pensions is expected to drive up the scale of personal pensions, which may bring incremental capital to the market.
Kong Xiang, an analyst at Guoxin Securities, believes that the full implementation of the personal pension system will drive a further increase in scale, which is expected to bring a certain amount of incremental capital to financial institutions such as banks, funds, and insurance. It is estimated that by 2030, the size of personal pensions may reach 1.45 trillion yuan, bringing incremental capital of 0.63 trillion yuan, 0.15 trillion yuan, 0.46 trillion yuan, and 0.22 trillion yuan to banks, bank financial managers, funds, and insurance, respectively.
“Individual pensions will be fully implemented, and total contributions are expected to reach 2.7 trillion yuan in 2023-2032.” Analysts at Guotai Junan Securities also said that the four types of products share the incremental personal pension market. It is estimated that 2023-2032 will bring 1.0 trillion yuan, 557.7 billion yuan, 298.4 billion yuan, and 162.9 billion yuan in incremental capital for bank deposits, funds, insurance, and bank financial management, respectively.
However, since the implementation of the personal pension system, the industry believes that it still faces problems such as opening more accounts and less investment, limited tax benefits, and unattractive products. Kong Xiang said that in order to better enhance the appeal of the personal pension system, there are still several aspects that can be further optimized, including improving preferential tax policies, dynamically adjusting annual contribution limits, and involving differentiated preferential tax policies for different groups. Furthermore, while optimizing product supply, increasing residents' participation, it is possible to select product types by moderately opening production. In addition, optimize withdrawal conditions, flexibly set account fund withdrawal conditions, and set up special circumstances for early receipt of payment funds.
Zhou Jin, China's financial management consulting partner at PricewaterhouseCoopers, believes that “hot account opening” and “cold investment” of personal pensions are only short-term phenomena. Looking ahead, as personal pension products become more abundant, the “cold investment” situation is expected to gradually improve in the future.