The top-level guidance on individual pension was released, which defined the account system + tax preference, and the upper limit of payment was slightly lower than expected
On April 21, 2022, the general office of the State Council issued the opinions on promoting the development of individual pension. The opinions made it clear that individual pension is mainly based on the account system, workers participating in basic pension insurance can participate, and they need to open individual pension accounts and individual pension fund accounts. They can purchase products through paid individual pension, including bank financial management, savings deposits, commercial pension insurance There are four types of public funds, which can be received monthly, in installments or at one time under various conditions such as reaching the retirement age, and the institutional framework is in line with expectations. In addition, the state will formulate preferential tax policies to encourage qualified personnel to participate in the personal pension system, and set an annual payment ceiling of 12000 yuan, which is slightly lower than expected. Follow up attention will be paid to the implementation details of the policies, including the degree of tax preference, specific exhibition modes and business operation processes.
Residents’ perspective: the effect of short-term tax holiday is limited, and the supply of pension products is more diversified
Considering that the preferential tax policies for individual tax deferred commercial endowment insurance are relatively insufficient, we expect that the preferential tax policies for individual pension accounts may be further improved. We think there are two possible preferential tax policies: (1) paying deferred tax at the applicable tax rate at the time of receiving; (2) Part of the tax paid is exempted. However, according to our calculation results, it is estimated that the tax saving effect of the preferential tax policies for personal pension accounts for less than 1% of the current residents’ income. We calculate by assuming the number of taxpayers, participation rate and occupancy rate. Under the neutral assumption, the annual capital scale of individual pension may reach 273 billion yuan.
From the perspective of financial institutions: the channel side is dominated by banks, and the product side is favorable to the head
On the channel side: without changing the original channel pattern, banks have stronger comparative advantages. The bank has the sales qualification of bank financial management, endowment insurance products, savings and public funds. It can complete the allocation of multiple products through a single channel. At the same time, the bank grasps the capital account and has more bonding points with residents. In the personal pension market, the bank has stronger channel advantages. However, we expect that the pension will have little impact on the original competition pattern at the channel end. On the product side: it is good for the product side, especially for the head asset management company with equity asset allocation as the core. According to the US IRA data, equity funds accounted for a relatively high proportion, reaching 33.8% by the end of 2020. If other assets are excluded, the proportion of mutual funds will reach 82.0%, of which the proportion of equity funds will reach 62.0%. In addition, the head company is expected to take the lead in accessing the personal pension white list, and the first mover advantage is more obvious.
Benefit the participants of various financial institutions, and the head institutions may benefit more obviously
In the short term, due to the limited effect of tax savings and the existence of payment ceiling, the scale of individual pension is expected to be relatively small in the short term. In the medium and long term, due to the long-term locking and inclusive characteristics of individual pension accounts, it is conducive to cultivating residents’ awareness and habits of financial asset allocation. In the long term, it will have a far-reaching impact. Both the channel side and the product side will benefit. The individual pension system will further strengthen the Growth Logic of big wealth management. The channel side is more favorable to banks and channel parties with strong original traffic, and the product side is more favorable to asset management institutions. We recommend Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) and China Industrial Securities Co.Ltd(601377) and China Greatwall Securities Co.Ltd(002939) , which account for a relatively high profit contribution of public funds; We are optimistic about China stock market news, which has mastered traffic resources and has advantages in the original channel end; In addition, commercial endowment insurance has relative competitive advantages such as guaranteed income and floating income. Head insurance companies have all the operation and investment experience of the three pillars of the endowment system, superimpose the advantages of the service side, or are expected to achieve new business growth. It is recommended that China Pacific Insurance (Group) Co.Ltd(601601) 601 , Ping An Insurance (Group) Company Of China Ltd(601318) , China Life Insurance Company Limited(601628) , and China Life Insurance Company Limited(601628) , which have certain advantages in commercial endowment insurance products.
Risk warning: the strength of preferential tax policies is less than expected; The pilot promotion effect was less than expected.
