Key investment points
Event: on April 21, the opinions of the general office of the State Council on promoting the development of individual pension was issued. The main contents include: 1) individual voluntary payment and full accumulation of accounts; 2) Upper limit of payment: 12000 yuan per person per year; 3) The pension paid can be used to buy mature and standardized financial products focusing on long-term preservation, such as bank financial management, savings deposits, commercial pension insurance, public funds and so on; 4) Enjoy preferential tax policies; 5) Receiving: it cannot be received in advance. In case of reaching the basic pension receiving age, loss of work, going abroad and other situations, it can be received monthly, in batches and at one time. Once the receiving method is determined, it cannot be modified, and the account assets can be inherited after the participant dies.
Improve the three pillar old-age security system and deal with the aging population. China's pension system: the first pillar is basic pension insurance, covering 1.0 billion people by the end of 2020, with a total fund balance of 5.81 trillion yuan; The second pillar is enterprise annuity and occupational annuity. By the end of 2020, the total number of people covered by them is about 57 million, and the cumulative balance of the fund is 3.54 trillion yuan; The third pillar is individual pension. As there is no perfect individual pension account system in China, it is mainly composed of tax extended commercial pension insurance, pension finance, pension fund and other commercial pension financial products, and the overall scale is limited. At present, China's pension situation is grim. In the Research Report on the third pillar of China's pension issued by the Insurance Association at the end of 2020, it is predicted that "in the next 5-10 years, China is expected to have a pension gap of 8-10 trillion yuan." The opinions aims to guide residents to make sufficient reserves for pension and deal with the shortage of pension funds under the increasingly serious situation of population aging.
There is no impact on the existing commercial insurance, which will benefit the development of asset management institutions in the long run: personal pension is essentially to attract residents' compulsory savings with tax preference, but from the perspective of existing terms, it may not be as good as increased life insurance or annuity insurance with high predetermined interest rate. In 2016, the pilot of tax excellent health insurance was launched. In 2020, the premium income of tax excellent health insurance was 2.175 billion yuan, while the premium income of health insurance in the same year was 817271 billion yuan, accounting for a relatively low proportion of tax excellent health insurance. Similarly, the specific impact and future development of individual pension need to observe the implementation of subsequent specific policies. We believe that it is difficult to impact the existing commercial insurance in the short term. In the long run, the duration of individual pension is long. With its scale growth, it will introduce long-term and stable funds into the real economy and capital market, which is conducive to stabilizing the short-term fluctuations of the capital market and improving the management scale of asset management institutions. The number of individual income tax payers in China is about 65 million. Assuming that 20% of them are willing to participate in individual pension, the scale will reach 156 billion yuan. If 30% are willing to participate, the scale will reach 234 billion yuan, and the capital scale is considerable.
Investment suggestion: the introduction of individual pension will help improve the third pillar of China's pension, and its impact on the insurance market and capital market needs to be observed. We believe that it is difficult to impact the existing commercial insurance in the short term. At present, the valuation of the insurance sector is at a historical low, and the pressure on the liability side is the core reason for the suppression of the current valuation of the sector. However, at present, various listed insurance enterprises have actively launched various measures to seek the long-term sustainable development of the insurance business, and have a strong determination to reform. We believe that the development of the industry will usher in the dawn in the continuous promotion of reform and maintain the industry's "leading market-a" rating.
Risk warning: the implementation of the policy is less than expected, the number of participants is less than expected, etc.
