Plan to open the door to annuity sector

By Zhang Fengming  |   2008-6-12  |     NEWSPAPER EDITION

OVERSEAS companies will be able to enter China's enterprise annuity market in the long run and legislation will be boosted to propel the market, a government official said in Shanghai yesterday.

About 10 million people working in about 32,000 companies with a total of 151.9 billion yuan (US$21.89 billion) had joined the enterprise annuity scheme by the end of last year, said Dong Yingshen, director of the pension division of the Ministry of Human Resources and Social Security, yesterday at the Mercer's 2008 Global Retirement Forum.

That only accounted for 5 percent of the country's pension assets, far lagging behind the nearly 100 percent in markets like the United States, said Mercer, a US-based consulting firm.

"China's enterprise annuity market is still in an early stage and needs to develop more but in a gradual way," said Dong, who added the door will open to overseas providers in the long run.

Dong, however, said that legislation is also under way that will help manage the market better.

An earlier government forecast said that China's enterprise annuity funds will grow robustly over the years, hitting 1 trillion yuan in 2010 and 8 trillion yuan by 2030.

China promotes the building-up of social security pension plans, including enterprise annuities.