The Ministry of Human Resources and Social Security and the Ministry of Finance jointly issued the Interim Measures for the Management of Occupational Annuity Funds, which became a hot topic for a while. So what is an occupational annuity fund? What is the difference compared to other funds?

What is an occupational pension fund?

Occupational annuity funds refer to the supplementary pension insurance funds of government agencies and public institutions formed from the funds raised by legally established occupational annuity plans and their expected annualized expected returns from investment operations. These Measures shall apply to the entrusted management, account management, entrusted management, custody, investment management and supervision of occupational annuity funds.

Occupational annuity fund investment scope:

Occupational annuity fund assets are limited to domestic investment, and the investment scope includes bank deposits, treasury bonds, commercial bank financial products, trust products, securities investment funds, stocks, Financial products such as stock index futures and pension products. Among them, the total proportion of investment in stocks, stock funds, hybrid funds, and stock-based pension products shall not exceed 30% of the net value of the entrusted investment assets of the investment portfolio.

Development prospects of occupational annuity funds:

Occupational annuity is a compulsory supplementary pension insurance for government agencies and institutions, and has a minimum financial investment from the government, which can ensure the stable growth of occupational annuity . This also means that the business potential brought about by the rigid needs of the professional age is huge.

“Enterprise annuities are voluntarily established by enterprises, and the participants are employees of enterprise units. As of mid-2016, after ten years of development, the number of enterprise annuity participants was 23.21 million. Occupational annuities are compulsorily established, and the participants are "People in government agencies and public institutions." Sun Bo said that there are about 7 million civil servants in our country and about 30 million people in government agencies and public institutions, which means that the average annual coverage of occupations is significantly greater than that of enterprise annuities.

At the same time, according to the above personnel data, statistics show that the total occupational annuity fee paid by units and individuals is 12% of salary. It is estimated that the national occupational annuity payment can reach an average of 150 billion yuan per year. Taking into account the expected annual investment Taking into account expected income factors, the occupational annuity market size is expected to reach trillions in five years.

So, according to the relevant provisions on occupational annuity investment in the "Measures", first, occupational annuities are limited to domestic investment, and second, the upper limit of the proportion of occupational annuities investing in equity-based equity products is 30%. If a rough calculation is made based on these two points, it is estimated that the amount of funds entering A-shares from occupational annuities in five years will reach up to 300 billion yuan.