In recent years, great progress has been achieved in the reform and improvement of China's social security system. Corporate annuity and other new supplementary pension systems in addition to the statutory basic pension bring good prospect for commercial banks' pension business. As of end of June this year, ICBC secured its leading market position by having 9,520,000 personal pension accounts under management, RMB 43.5 billion of pension fund under trust and RMB 174.3 billion of pension fund under custody.
China's pension market was expanding fast in the last few years, said an executive with ICBC. The market has been significantly improved, comprehensive rules have been established, market conditions remain good, market scale keeps expanding. ICBC is among a handful of banks in China certified to provide trust service for corporate annuity fund, account management service and fund custody service. ICBC Credit Suisse Assets Management Co. Ltd, a company held under ICBC, is accredited to manage the investment of corporate annuity fund. The "full license" on corporate annuity allows ICBC to provide all-inclusive annuity services in line with the customer needs and pave the way for the Bank to loom large the business.
ICBC upholds and executes a strategy of "leading the way by technology" in order to continuously improve pension service and appeal to different needs of the customers. The independently developed pension business system has been awarded on numerous occasions by regulatory authorities. Over the past few years, ICBC made continuous effort on the system to fuel the growth of pension business backed by strong technology. In 2010, ICBC set up an integrated system for the management of different pension funds encompassing processing, trustee management and account management. The system significantly drives the improvement in the management of pension business and customer service. Meanwhile, automated processing, self-services are some of the exclusive services to customers through upgrade and optimization of the customer service platform, which translate to greater online interaction with the customers.
ICBC's strong product innovation capacity is an engine to drive the growth of pension business. Besides the routine management and services, for the objective of catering individual needs of corporate annuity customers, ICBC upgraded the functions in Internet Banking annuity service, Telephone Banking annuity service and retooled Peony Annuity Card and other annuity products. ICBC launched a range of corporate annuity plan products with concerned organizations ("Ruyi Pension I", "Ruyi Pension II" and "Ruyi Pension III") and with other insurance companies ("Taiping ICBC Intelligent Credit", "Ping'an ICBC Stay with You", "Taikang ICBC Forever Peace", "Chinalife ICBC Forever Wise", "Happy Retired Life IV". They represent the competitive edge of ICBC in meeting the diversified needs of the customers.
Worthy of note is that, pension business is an important measure of ICBC to support the growth of small-and-medium enterprises. ICBC starts from "Ruyi Pension", a collective corporate annuity plan, as a base to offer highly efficient, convenient annuity services to the small and mid-sized enterprises. At the end of June, 9,107 enterprises enrolled 8 ICBC collective plans covering 1.76 million workers. Growth of "Ruyi Pension" has been impressive, where ICBC acts as the trustee and account manager. Today, over 4,000 enterprises have enrolled in the plan covering nearly 900,000 workers.
Background
Pension Business
Pension business refers to a range of services provided by banks in accordance with the laws and regulations, contract terms and conditions agreed. Banks are entrusted by customers to provide trustee management, equity information management, asset custody, agency services, asset management and advisory service on social security funds, corporate annuity funds and other similar funds.
At present, corporate annuity is a major offering in banks' pension business. Corporate annuity is a fee-based intermediary business, where banks are entrusted by customers to provide trustee management, account management, fund custody and advisory service on corporate annuity funds, as prescribed under the laws and regulations, contract terms and conditions. Relative to a single corporate annuity plan established by a company, corporate annuity collective plan is set up by the trustee, who works with a number of organizations to centralize and manage the corporate annuity of many enterprises and their workers (trustors), and run the collective plan under the investment portfolio. Collective plans are designed for small and mid-sized enterprises with many distinctive features: standardized processes, simple working procedures, optimal management model, diversified investment product, one-stop management services.
ICBC was one of the earliest banks in China to open pension business. ICBC took the first attempt on the business as early as in 2001. Since 2005, China's pension market is expanding fast, comprehensive rules have been established, market conditions remain good, market scale keeps expanding. ICBC fully capitalized the opportunity brought by the robust growth. In August 2005, ICBC was one of the accredited account managers and custodian banks for corporate annuity fund. ICBC became an accredited trustee company in November 2007. Together with the accreditation granted to ICBC Credit Suisse Assets Management Co. Ltd, a company held under ICBC, to provide investment management service on corporate annuity fund, the "full license" on corporate annuity allows ICBC to provide all-inclusive, integrated corporate annuity services for all customers.
At present, ICBC pension service is targeted at companies of different sectors, public organizations, social insurance administrative departments and government units. Services involve information management (recording, management, enquiry, storage and backup of equity information about pension fund) and asset management (trustee management, fund custody, wealth management, and agency business).
In 2008, ICBC as the trustee set up a range of corporate annuity collective plans under "Ruyi Pension", which was warmly received in the market. Today, ICBC has launched three collective plans Ruyi Pension I, Ruyi Pension II and Ruyi Pension III.