麥肯錫（McKinsey）：中國養老金市場的制勝戰略（英文版）(42頁).pdf

1、June 2019 The winning strategy for the pension market in China Table of contents I. An overview of the global pension system Introduction II. An outlook of Chinas commercial pension market III. Financial institutions winning strategy in the commercial pension market 65 2 5 14 21 Introduction 2The wi

2、nning strategy for the pension market in China The winning strategy for the pension market in China3 On March 6, 2019, in the Work Report at the Two Sessions, Premier Li Keqiang said: “The social security system and policy need to be further perfected, and a multilevel pension security system needs

3、to be developed.” This remark has once again prompted Chinese society to reflect on elderly care and how Chinaa fast devel- oping countrycan address this issue. Which retirement types are most suitable for Chinese pensioners? Traditional retirement models are being challenged as China acceler- ates

4、towards an aging population with a low birthrate Nations usually change into an aging society over a gradual and slow process. For example, it took France and Sweden 115 years and 85 years, respectively, to reach that stage. However, it has taken China only 25 years. In stark contrast, the decreasin

5、g birthrate in China hovered around 1.6 in 2018, much lower than the replacement ratio of 2.1. Due to the double trends of aging and low birthrate, it is expected that the elderly depen- dency ratio will fall from 9.9 (an average of 9.9 working people support 1.0 pensioner) in 2000 to 5.8 in 2020 an

6、d then to 2.3 in 2050. There- fore, the traditional family elderly-care models will not be sustainable. China is developing a three-pillar pension system, but it is a long and problematic route Chinas three-pillar pension system started in 1991 and mainly relied on the first pillar of public pension

7、. The country itself is responsible for the pension system, with an AUM of about RMB 4.4 trillion accounting for over 70 percent of the total amount. The second pillar is enterprise and occupational annuity. The enterprise annuitys responsible owners are enterprises and their employees, and the occu

8、pational annuity is owned by the public sector and its staff. Their total AUM is around RMB 1.6 trillion, making up the remaining 30 percent. The third pillar, the personal pension, is still at a nascent stage and currently has no unified definition and scope. The first pillars overall volume and am

9、ount have continued to rise, but the income replacement ratio (defined as the ratio of the pension one receives upon retirement to the income received before retirement) remains less than 50 percent. Moreover, the governments burden continues to be a challenge, as it is faced with slowing rev- enue,

10、 growing expenses, and complete depletion of funds in some areas. The financial subsidy for the first pillar is increasing year by year, though this will be hard to sustain in the long run. The commercial reform of Chinas pension system is imminent, and the second and third pillars are in urgent nee

11、d of a balanced development. Its inevitable that the gap must be closed quickly and the second and third pillar of the commercial pen- sion developed Chinas retirement system should be composed of the pension finance and retirement sector (Exhibit 1). Pension finance refers to financial activities t

12、o meet an individuals retirement life needs, while the retirement sector refers to the related services, products, and property indus- tries to meet social retirement needs. There are two types of pension finance: institu- tional and noninstitutional. According to industry consensus, the institution

13、al type has four main characteristics: a unique and dedicated retire- ment account, the account is always locked ex- cept for withdrawal upon retirement, the account is entitled to tax preferential policies, and pen- sion investment is subject to special regulation. For historical reasons, Chinas de

14、velopment of the commercial pension is relatively behind, and the first third-pillar productthe personal tax- deferred pension insurancewas only launched in the middle of 2018. 4The winning strategy for the pension market in China Under the current circumstances in China, McKinsey believes that a co

15、mmercial pension system mainly supported by the second and third pillars has more advantages: (1) it will be a strong complement to the public pension; (2) it will provide more diverse and customized retire- ment financial plans for consumers and their enterprises; (3) it will enable investing in mo

16、re asset classes to further promote Chinas capital market development. In addition, the pension systems commercialization reform can also help foster a stable pension system in the nation by clarifying ownership among the state, enter- prises, and individuals. Especially over the past two years, the

17、 development of the commercial pension sector has gained traction due to the top-level design from the government authori- ties, broad participation from enterprises, and elevated awareness from the public. This white paper focuses on Chinas institutional pension system, especially the development o

18、f the second and third pillars. We sincerely hope this publication will offer insights on the develop- ment of participants in Chinas pension market. Retirement industry: services and manufacturing industries that meet the needs of social retirement Products: medical/healthcare products/equipment an

19、d products for the elderly Properties: dedicated nursing homes, retirement-themed medical institutions, and retirement community property Services: elderly care, medical/healthcare, etc. ProductsServicesProperties Focus of this paper Retirement wealth manage- ment Pension insurance Pension trust Ins

20、titutional type 1st pillar: public pension 2nd pillar: enterprise/occupational pension 3rd pillar: personal pension Noninstitutional type and other retirement-related investments, e.g., property and precious metal Pension finance: institutional and non-institutional financial activities to meet the

21、need of personal retirement Capital needs Retirement needs Exhibit 1: Overview of the retirement finance industry and value chain Chapter 1: An overview of the global pension system The winning strategy for the pension market in China5 6The winning strategy for the pension market in China In the glo

22、bal market and in light of different development paths and stages and retirement mindsets, countries show significant differences in terms of pension structure, market efficiency, level of policy support and governance (Exhibit 2). McKinsey evaluates each countrys pension system along two dimensions

23、: (1) the mix of pension structure: a higher proportion of the first pillar indicates the governments take on bigger responsibilities in the pension system, thus private retirement savings by the business and consumers is a lower responsibility and has less potential in the market. (2) The maturity

24、of financial markets, especially the retail asset management market: the maturity of the market decides commercial pension products type and variety of providers. Based on these two dimensions, we believe that the pension market in advanced markets demonstrates three types: government-benefit type,

25、commodity market type, and multimonopoly type (Exhibit 3). Devel- oping countries, including China, will evolve into one of these models as their economy grows and their pension system matures. 1. Commodity market type. In mature markets, such as the United States and Canada, pen- sion systems are c

26、ompletely market driven after almost a century of development. The governments role in the first pillar is very low (e.g., 10 percent in the United States), while their retail asset management is highly ad- vanced. Consumers have been fully educated by the capital market on where they can find a var

27、iety of easy-to-buy pension products to Source: OECD; expert interview; McKinsey Global Insurance database; McKinsey analysis Balanced mix of 3 pillars Hybrid products Replace- ment ratio1 = 50% Led by 2nd and 3rdpillars Replace- ment ratio11= 100% Led by DC products Tax reduction/ exemption without

28、 cap Account is completely mandatory Investment is highly flexible Structure features Market effective- ness Level of regulatory support Level of control 2nd and 3rdpillars lag behind No tax benefits Account is completely voluntary Investment is highly restricted Replacement ratio1= 0% Led by DB pro

29、ducts Exhibit 2: Pension systems differ, mostly in market activities and levels of regulatory support and government control Italy CanadaUSJapan US Germany USFrance CanadaFranceItaly UKJapanCanada S. Korea USJapanCanadaUKItaly UKGermany Japan FranceUS France Germany S. Korea S. Korea Italy GermanyFr

30、ance USS. Korea JapanUK S. KoreaUKCanada JapanGermany S. Korea UKGermanyItaly France ItalyCanada 1 Net replacement ratio: calculated by the net amount of pension received by individuals, divided by the net amount of income before retirement, while considering the personal income tax and social secur

31、ity paid by pensioners. This indicator is used to measure the effectiveness of the amount of pension received under the pension system to replace pre-retirement income; here we use the male net replacement published by the OECD The winning strategy for the pension market in China7 meet their needs,

32、including low-cost ETF (ex- change-traded funds) and TDF (target-date funds), among others. Retail asset manag- ers, led by fund companies like Fidelity and Vanguard, are the key market players. 2. Government benefit type. European coun- tries like Germany and France provide good benefits. The first

33、 pillar accounts for a large share in their pension system (e.g., 69 per- cent in Germany). Meanwhile, the growth of the second and third pillar has flattened at a large scale. Since their retail asset manage- ment industry is less mature than the United States and UK, insurers are the key play- ers

34、, with much less competition from fund companies. 3. Lead by top players type. In this kind of market, as represented by Japan and South Korea, three pillars are evenly distributed. Unlike the commodity market type, Japans and South Koreas capital and asset man- agement market is less developed, and

35、 their consumers highly value brand but know less about pension and investment products. As a result, the markets are dominated by big insurers and banks. Each countrys pension system development has its own special circumstances and history; therefore, there is not a single correct and ideal model.

36、 We think the United States, Germany, and South Korea are typical examples of each model, providing a reference framework for Chi- nese regulators and pension companies. Development level of the 1st pillar of the governments pension system Exhibit 3: The global pension insurance market can be divide

37、d into 3 types market driven High Development level of retail asset management Government benefit Led by top players Concentrated market with little product selection Market is fragmented with a variety of products South Korea Japan US UK France Germany Italy Canada Led by the govern -ment Low LowHi

38、gh Commodity market 8The winning strategy for the pension market in China The United States: highly advanced capital market led by fund compa- nies Tax incentive policies enable the fast develop- ment of the second and third pillars After a centurys development, the US pension system is dominated by

39、 the second and third pillars due to various government incentive policies. The 401(k) plan in the second pillar, the most important employee retirement plan for private companies, is a corporate supplementary retirement insurance plan jointly contributed to by employers and employees. The IRA in th

40、e third pillar, an investment pension account voluntarily contributed to by individuals, has be- come a pension product on par with the 401(k) in the US private pension market. In the past de- cades, the US government improved policies and regulations, introduced tax-deferred incentive policies, and

41、 kept raising exemption amounts. Meanwhile, it also added automatic joint clauses and improve accounts transferability, by allow- ing a free transfer of capital among accounts. So far, the second and third pillars individual commercial pension capital has accounted for 90 percent of the total pensio

42、n asset. A mature capital market enables fund-type asset managers to lead the market Individuals have the freedom to select products, whether they choose a 401(k) or IRA. As the US capital market gradually matures, fund-type as- set managers have used their rich product mix, professional investment

43、management, and bull markets to generate high returns on investment, thereby successfully overtaking banks and insurers to become the leader in the second and third pillar pension markets in the United States. For example, asset management products proportion in the IRA plan has significantly risen

44、in the past 40 years. As of 2017, it accounted for 65 percent in the total assets of the IRA plan (Exhibit 4). Blackrock,Fidelity, and Vanguard are the major providers in the common fund prod- ucts, contributing over 40 percent1 to market share by AUM. Germany: national public pension dominates, whi

45、le commercial pen- sion is catching up Overburdened public finance is prompting pension responsibilities to move toward the private sector Germany is the first country in the world that established a social security system. As one of its key components, the pension system boasts a history of 120 yea

46、rs. The German government leads and pursues a long-term pension system of “receive/pay on the go.” However, due to a slowing economy, accelerated aging phenom- Tax incentive policies enabled fast development of the 401(k) plan and IRA in the United States, the commercial pension capital has accounte

47、d for 90 percent of the total pension market. Fund-type asset managers become leaders in the second and third pillar pension markets in the United States using a rich product mix and profes- sional investment management skills. 1McKinsey US Wealth and Asset Management Practice estimate. The winning

48、strategy for the pension market in China9 enon, and increasing social dependency ratio, its government pension gap is widening year by year. Unable to absorb this burden, the govern- ment started to actively promote reforms in the pension system at the start of the 21st century by encouraging more p

49、ension responsibilities to transfer from the public to the private sector. For example, it introduced the BRSG to enable annuity for low-income people through raising the tax-deduction cap and offering employ- ers subsidies. The government also introduced pure DC products to foster the development of the second pillar enterprise annuity. In addi- tion, the German government also launched the Riester Reform to expand the pension scope to insurance, fund, and savings products, so as to encourage insurers, banks, and fund companies to provide pension products.