Recently, the General Office of the State Council issued the “Opinions on Promoting the Development of Individual Pensions”, which means that the individual pension system has finally moved from the blueprint to reality. The “Opinions” make it clear that the funds in the personal pension fund account are used to purchase financial management, savings deposits, commercial pension insurance, public funds, etc. that comply with the regulations. The operation is safe, mature and stable, the target is standardized, and it focuses on long-term value preservation and meets the preferences of different investors. Products, participants can choose independently. GF Fund said that it is of great significance to promote the development of personal pensions. As the vanguard of the market-oriented operation of pensions, the public fund industry can make efforts in five directions, improve its internal strength, serve the national pension cause solidly, and help the high-quality development of personal pensions.
It is of great significance to promote the development of personal pensions
Promoting the development of personal pension is an inevitable choice under the trend of population aging in my country. Aging is a global phenomenon as fertility rates decline and life expectancy increases. According to the results of the seventh census in 2021, the proportion of my country’s population aged 65 and over is close to 14%. With the increasingly prominent phenomenon of population aging in my country, the old-age security system will face increasing challenges and pressures, and the individual pension system is an indispensable part of the multi-level social old-age security system. In the early stage of aging, plan ahead, build a comprehensive personal pension system, and lay a solid institutional foundation for meeting the peak of aging.
Promoting the development of individual pensions is the proper meaning of the theme of common prosperity. To promote common prosperity, the issue of distribution is the core, while the improvement and construction of people’s livelihood security, including pensions, is the foundation. Therefore, promoting the common prosperity of all people and solving the problem of old-age care is the meaning of the title. The personal pension system is of an inclusive nature, and promoting the development of personal pensions will further give full play to the important role of social security in ensuring and improving people’s livelihood, enhancing people’s well-being, and achieving common prosperity.
Promoting the development of personal pensions is an objective requirement for improving the multi-level pension security system. The “14th Five-Year Plan” and the outline of the long-term goals for 2035 clearly propose to develop a multi-level and multi-pillar pension insurance system, increase the coverage rate of enterprise annuity, and standardize the development of the third-pillar pension insurance. The 2021 government work report also mentioned the “third pillar pension insurance” for the first time. The three-pillar pension system mainly involves the three-party pension responsibility of the government, units and individuals. At present, my country has basically established a three-pillar institutional system structure, but the structure needs to be further optimized. Especially in the context of the intensifying trend of population aging, the first pillar of the basic old-age insurance is the only one, with a heavy burden and high sustainability risks, which will affect the performance of the basic old-age pension. Therefore, promoting the development of individual pensions will play an important role in the healthy and balanced development of my country’s multi-level old-age security system.
Give full play to the professional advantages of public funds to serve the national pension cause
As the most mature professional institutional investors in the capital market, public funds serve the public in financial management and help the preservation and appreciation of pensions. This is not only the original intention of the industry, but also the mission of industry development. Up to now, the number of investors in the public offering fund industry has exceeded 540 million, and various pension assets under the entrusted management have exceeded 4 trillion yuan, and have created good long-term returns. It plays the role of the main force in the pension system, and has successfully completed the task of maintaining and increasing the value of pension assets.
In the future, public funds should further shoulder the responsibilities of the times and serve the country’s pension cause. GF Fund believes that it can make efforts in five major directions, improve its internal strength, and provide investors with its rich supply of pension products, high-quality investment management capabilities, distinctive underlying fund reserves, and intelligent pension financial investment advisory services. The “one-stop” comprehensive solution in the pension scenario will continue to play a major role in realizing the preservation and appreciation of pensions; at the same time, in response to the current weak investment awareness of national pensions, we will work with banks, Internet and other wealth management institutions to carry out investor education work to help people establish a rational and long-term pension investment concept.
First, to be a complete supplier of pension products and provide residents with sufficient investment choices.
Compared with the first and second pillars, a major feature of the third pillar is that it gives investors the right and flexibility to choose, and guides residents to make pension plans that meet their own characteristics by providing pension products with different life cycles and different risk preferences. Therefore, the supply of pension products based on the characteristics of customer pension investment and diversified needs is very important.
The pension target fund in the domestic public fund industry is a product type born to serve the elderly. Wind data shows that as of the end of 2021, the management scale of pension target funds reached 113.3 billion yuan, which has basically doubled in each year since its establishment, and is also one of the fastest growing fund types in the fund industry. After four years of investment and operation, it has accumulated a good performance record and a wide customer base, and is well prepared for the era of personal pension.
For GF Fund, the company has been deeply engaged in pension investment for a long time. After the introduction of the policy in 2018, it has actively deployed pension products. It is one of the first batch of pension target fund managers. Up to now, the company has a total of 7 pension target funds, forming a relatively complete product line. Among them, 4 target risk funds have been established according to the risk tolerance of different investors; another 3 target date funds have been established, covering the three retirement periods of 2035, 2040 and 2050, and can meet the pension needs of customers of different ages.
Second, be a professional pension investment manager to provide professional protection for the preservation and appreciation of pension assets.
On the one hand, we must continue to improve our asset allocation capabilities. The pension target fund takes asset allocation as the core, and adopts two strategies proven by mature markets, namely target date and target risk. In order to give full play to the effectiveness of the strategy, in terms of strategic allocation, the fund company should fully understand and reasonably use the basic strategy of target date and target risk, based on the understanding of the characteristics of investors’ age, income, pension withdrawal, risk management, etc. and quantification, with a focus on determining average risk exposures to ensure that assets and liabilities are matched in investments. In terms of tactical allocation, rely on strong macro strategy research and asset research such as stocks and bonds to provide support for the dynamic adjustment of the portfolio; on the other hand, it is necessary to establish a scientific and effective fund selection mechanism to improve fund research capabilities.
Asset allocation has always been the focus of GF Fund’s multi-investment capability building. The company’s asset allocation research started in 2013. It has gathered practical talents in the field of FOF and fund investment advisory at home and abroad, and has achieved full coverage in asset allocation, quantitative research, and fund research. The asset allocation management system for asset allocation and fund variety selection has built a solid asset allocation capability.
Third, be a rich underlying fund provider to provide a basis for individual pension asset allocation.
Various types of underlying funds with distinctive styles are the basis for the investment management of pension target funds. While enriching asset classes, we should also start with product design and investment behavior constraints to ensure a clear and stable fund style.
As of the end of 2021, GF Fund has a total of 295 public funds, covering active equity, fixed income, passive index, overseas investment, asset allocation, quantitative investment and other asset types, and has initially built a multi-market, multi-strategy and multi-regional product line. Pension asset allocation provides a relatively complete underlying asset.
Fourth, be an intelligent pension financial investment and advisory service provider, providing one-stop solutions for pension wealth management.
Pension financial products are quasi-public products with relatively complex product attributes. From the perspective of international experience, robo-advisors can provide investors with investment advice through more scientific and professional methods, thereby effectively making up for the investment barriers caused by residents’ lack of financial knowledge. Investment advisory services are currently playing a significant role in the US pension market. According to statistics from the US SEC, as early as 2016, nearly half of investment advisory services in the US were provided to pension accounts.
From the perspective of the third pillar pension, the implementation of the personal pension policy will provide a potential market space for robo-advisors to fully develop. The closed-managed fund account system of the third pillar of pensions and the decades-long continuous payment period can provide suitable application scenarios for robo-advisors.
From the perspective of inclusive pension finance in a broader sense, the boundary between pension and private wealth management is becoming increasingly blurred, and consumers’ needs for the two are increasingly overlapping. The development trend of the financial industry.
As one of the second batch of pilot fund investment advisory institutions, GF Fund has created a full-process fund investment advisory companion system covering “pre-investment, mid-investment, and post-investment”: to deeply understand investors’ investment needs before investing, and customize assets for them Configuration plan; Invest China skillfully uses financial technology to assist clients in completing the handling of fund investment advisory business simply and conveniently; post-investment is the core link of fund investment advisory services. By providing customers with warm companionship throughout the process, it helps clients to keep track of their accounts in a timely manner It operates dynamically and rationally responds to market fluctuations.
Fifth, be a cultivator of investor education and guide residents to establish a correct pension investment concept.
Judging from the development of my country’s old-age security system, the first pillar occupies a major position, and individuals’ awareness of independent old-age planning is still relatively weak. Therefore, the industry should continue to strengthen investor education and enhance the nationals’ awareness of pension investment.
First of all, we must guide residents to formulate reasonable investment goals. From the perspective of capital attributes, pension investment should aim to pursue long-term steady growth and increase the actual replacement rate, rather than blindly pursuing short-term high returns. Fund companies need to guide investors to understand their own investment needs in the pension scenario and formulate reasonable investment goals.
Second, guide residents to stick to long-term investment. For a long time, due to the high volatility of my country’s capital market and the “short-lived bears are long”, investors are accustomed to “making quick money”, and risk appetite tends to change greatly with the market conditions. This may lead to insufficient patience and determination of pension investors under market volatility. Therefore, fund companies should strive to change the current status quo by promoting fixed investment in funds, and guide residents to maintain and increase the value of pension assets through long-term investment.
In addition, it is necessary to deepen residents’ understanding of pension products, and help them choose suitable pension investment plans by strengthening appropriate sales. Different investors have different risk and return needs, and the preferences of the same investor at different stages of the life cycle will also change. Such complex preferences and diverse needs can easily lead to misplaced choices and matching deviations. Therefore, fund companies should deepen cooperation with wealth management institutions such as banks and the Internet, conduct comprehensive and rigorous suitability assessments based on factors such as investors’ age, retirement date, income level, and expected investment period, and give professional opinions to serve investors well. “Guard” work.
GF Fund said that as one of the few fund companies in the industry that has a number of pension business licenses such as social security fund investment managers, basic pension insurance fund securities investment management institutions, etc., the company has always regarded serving the national pension and improving people’s livelihood as an important responsibility. , regard the pension business as a “long-term business“, and strive to contribute to the construction of the national pension security system. At present, my country’s personal pension investment market is in the early stage of development, and it should continue to invest, cultivate carefully, and grow together with investors. In the future, GF Fund will further shoulder the responsibilities of the times, give full play to its professional advantages, and help the high-quality development of personal pensions. (CIS)