CHINA - One of China's dedicated retirement fund firms, Tai Ping Pension, expects to win up to RMB3bn (US$363m) of assets under management during its first year of operations, according to company executives.
The fledgling fund manager, given tentative permission to operate last year, has already won contracts to manage RMB20m of pension cash. The company is still waiting for formal approval for an operating licence from the Chinese government, expectedwithin months.
Executives say that as Tai Ping is only one of two dedicated fund companies it expects to capture a windfall in contributions from people eager to save their money in the private sector.
The firm is permitted to operate under a pension reform programme in the north eastern rustbelt province of Liaoning, where companies are given tax incentives to set up supplementary occupational pension schemes known as enterprise annuities. This is thefirst type of private pension plan that employees will be able to make voluntary contributions into as part of government reforms to boost longterm savings.
As state-owned companies close or privatise and eliminate traditional cradle-togravewelfare benefits, the government is encouraging the development of a modern occupational pension system.
Tai Ping, based in Shanghai, is awaiting a national licence from the Ministry of Labour andSocial Security that would allow it to run enterprise annuities for different typesof state-owned and private companies across the country, according to Xie Yiqun,vice president of China Insurance Holdings, which owns 4% of Tai Ping.
“The business development plan will be tailored to the specific market conditions ineach region,” Xie said.
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