What’s new: The pension-focused subsidiary of Chinese insurance giant Ping An Insurance (Group) Co. of China Ltd. is planning to boost its private pension business with part of the new capital it is raising, sources familiar with the company told Caixin.
Ping An Annuity Insurance Co. of China Ltd. announced Sunday that it is raising 10.5 billion yuan ($1.6 billion) from its parent to “to support business development,” without elaborating.
The sources said that the fundraising is also related to the company’s transformation and development strategy.
A portion of the proceeds will become Ping An Annuity Insurance’s registered capital, which will rise to 11.6 billion yuan, the largest amount of any of China’s 10 pension insurers — including the one that is in the process of being established, according to Caixin’s calculations.
The background: Private pension products are the underdeveloped third pillar in China’s “three-pillar” pension system. The first two pillars, the state-run basic pension insurance system and employer-sponsored pension plans, account for nearly all of the funds set aside for retirement in China.
As a pension shortfall looms, growing the third pillar has become a policy priority. China’s top insurance regulator has urged pension insurance firms to stop issuing certain kinds of short-term wealth management products and focus on developing the third pillar, which aims to offer customers longer-term investment products designed to help them prepare for retirement.
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Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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