Study On The Occupational Pensions Business Of China's Banks

The concept of occupational pensions has been introduced to China for no more than a decade. But in many foreign countries, occupational pensions have a history much longer than a century. After the Second World War, occupational pensions experienced a very fast growth period thanks to the extension of the average lifetime of the world's populations, the growth of population ageing problems and the increasing risks of ageing economy. The developed countries'experience indicates that it plays a very important role to set up occupational pensions mechanisms in order to lighten the government's burden, to promote the talented people flowing, to enhance the development of capital market and to cope with the population ageing challenges. As the most populous country in the world, China is now facing the most serious population ageing problems. Although China brought forward the regulations and policies concerning occupational pensions as early as the 1990's, yet the development of occupational pensions business was fairly slow. Such being the case, the Ministry of Labor and Social Security promulgated the Trial Measures for Occupational Pensions on May 1, 2004 and the Trial Measures on Occupational Pensions Fund Management in the same year together with China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission. The two Trial Measures have proclaimed that the occupational pensions funds in China shall be managed and operated by financial institutions such as banks, insurance companies, fund management companies, securities companies and trust companies. The specific roles and responsibilities of the four players in occupational pensions fund management, namely trustee, record keeper, custodian, investment manager have also been clearly defined in the two Trial Measures. Compared with insurance companies, fund management companies, securities companies and trust companies, commercial banks are late in starting the occupational pensions business. Currently, there is little academic study concerning commercial banks'occupational pensions business in China. Facing the huge potential of China's occupational pensions market and the coming fierce international competitions after China's entry to the WTO, China's banks have its own competitive advantages in the occupational pensions business. What are the significances for China's banks to develop occupational pensions business? What roles will the banks play in the occupational pensions fund management and what development strategies should China's banks adopt? Those are among the major topics of the dissertation and also the great concerns in China's banks business development.The dissertation is divided into eight chapters, namely"Chapter 1 Introduction","Chapter 2 About Occupational Pensions","Chapter 3 The Essentiality and Urgency of the Occupational Pensions Development in China","Chapter 4 The Comparison Study of Occupational Pensions at Home and Abroad","Chapter 5 The Significances of Banks'Occupational Pensions Business Development","Chapter 6 The Comparative Advantages and Specific Roles of China's Banks in Occupational Pensions Business","Chapter 7 The Development Strategies for China's Banks'Occupational Pensions Business"and"Chapter 8 The Conclusions". The dissertation makes the comparison analysis of the occupational pensions both at home and abroad in fields of theoretical underpinnings, related policies, governance models, development paths etc. From the standpoint of commercial banks, the dissertation has analyzed the significances, comparative advantages and various roles of China's banks in occupational pensions business development. Specific development strategies have been summarized and presented for the occupational pensions business development of China's banks under the circumstances where the trend for the comprehensive operations of China's financial industry is getting clearer and clearer. The main conclusions of the dissertation include: (1) Although the history is very short, the occupational pensions in China grow pretty quickly and have a great development potential in the future; (2) Overseas experience indicates that the development of occupational pensions provides banks with both opportunities and challenges. It has been an international trend for banks to develop occupational pensions business. In fact, many foreign banks have already become essential occupational pension fund managers; (3) Occupational pensions business is one of the best non-interest business types. The comprehensive profitability of the business is significant and promising; (4) Banks'features in branding, internal risk control, product R&D and marketing etc. are all among the competitive advantages in China's occupational pensions business; (5) China's banks have the capabilities of becoming the trustee, record keeper, custodian and investment manager in the occupational pensions business.The development of occupational pensions business is very important to the establishment of the social security mechanism and the construction of the harmonious society in China. To China's banks, occupational pensions business is also essential to their growth. The year 2007 will witness the overall opening-up of China's banking industry. China's banks will soon face direct competitions from international banks. It will be greatly helpful for China's banks to fasten the development of occupational pensions business in order to make full use of their own advantages and to speed up the improvement of business competitiveness so as to ensure an invincible position in the increasingly fierce international competitions.