DALIAN, China, Sept. 2 /Xinhua-PRNewswire/ -- ING today recommended that
more Chinese companies introduce occupational pension plans for their
employees after the government awarded new corporate annuity licenses in early
August as part of its drive to develop its pension infrastructure.
    The reforms come as the Chinese Government faces a rapid increase in
pension liabilities, with the ratio of the working population set to drop from
9:1 to 2.6:1 over the next 40 years(1).  Corporate annuity schemes can help
increase the number of people who are currently covered beyond the current 169
million workers, which represents less than 25% of the working population.
That compares with 85% in Hong Kong and 70% in Singapore(2).  In addition,
higher returns achieved by outsourcing fund management to private institutions
will help encourage inflows.

        (1) United Nations Estimates
        (2) Mandatory Provident Fund Authority, Central Provident Fund Board

    Alexander Rinnooy Kan, Member of the Executive Board of ING Group and
Chairman of ING Insurance Asia/Pacific said: "The Chinese government
recognises the challenges of pension provision and are pushing forward with
significant reforms to China's pension system."
    The comments were made at the International Pension and Insurance Forum,
which was sponsored by ING and organised by the China Insurance Regulatory
Commission.  ING's joint venture, China Merchants Fund Management, was one of
four non-domestic fund managers to obtain a license in August to manage
corporate annuity assets in China.  The Forum took place in Dalian in Liaoning
Province in North-Eastern China.  The Province is home to around 10% of
China's state-owned enterprises and the pilot scheme for corporate annuity
pensions, launched in 2001.  Dalian itself is the headquarters of ING Capital
Life Insurance Company, one of ING's two insurance joint ventures in China.
    "Pension reforms in China require a long-term vision and commitment from
all the stakeholders involved given its vast population, atypical demographics
and regional differences," Mr. Rinnooy Kan said.  "The future success of the
pension system depends largely on the proper implementation of occupational
and private pensions, and as such China is definitely moving in the right
direction."
    Assets for voluntary pension schemes currently stand at around 5 per cent
of China's GDP, compared with 94.1% in the Netherlands and 66% in the U.S.(3).
However, voluntary pension assets are expected to increase by RMB100 billion
($12.4 million) per year, according to government estimates.  Corporate
annuities serve as a good instrument to build occupational, or second pillar,
pension funds because they generally achieve a higher rate of return than the
majority of the majority of pension products which typically only invest in
low-yielding bank deposits.

        (3) China's Labour and Social Security Ministry, OECD
            Institutional Year Book 2003

    ING is active in supporting the development of the pensions industry in
China.  Its fund management joint-venture, China Merchants Fund Management was
the first Sino-foreign fund manager to be awarded mandates from the National
Council for Social Security Fund.  In addition, its two insurance joint-
ventures, ING Capital Life Insurance Company and Pacific Antai Life Insurance
Company, are expanding in the pensions' arena as well as individual and group
life insurance.

    ING is a global financial institution of Dutch origin offering banking,
insurance and asset management to over 60 million private, corporate and
institutional clients in more than 50 countries.
    With a diverse workforce of over 113,000 people, ING comprises a broad
spectrum of prominent companies that increasingly serve their clients under
the ING brand.

   Press enquiries:

     ING Insurance Asia/Pacific
     Karen Williams
     Tel:   +852-9106-1350
     Email: karen.williams@ap.ing.com

     Polly Leung
     Tel:   +852-2913-8792
     Email: polly.leung@ap.ing.com

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