Bank of China Signs Fund Custody Agreement with Jilin Social Insurance Company

On January 24, Bank of China (BOC) and Jilin Social Insurance Company signed Fund Custody Agreement on Personal Account of Endowment Insurance of Jilin Province in Beijing. Li Zaohang (Executive Director and Vice President of BOC), Yu Hongcai (Vice General Director of Jilin Labor and Social Security Department and General Manager of Jilin Social Insurance Company), etc.

attended the ceremony. The signing of this custody agreement was an important attempt for the mutual development and management of both social insurance sector and financial sector. It also deepened the cooperative relationship between BOC and Jilin Social Insurance Company.

BOC had accumulated rich experiences during the cooperation with National Social Security Fund, the long-term strategic reserve fund of the endowment insurance in China. In December 2002, BOC was selected as the custodian for entrusted assets of two National Social Security Funds. To provide good services, BOC input plenty of resources and had accumulated rich experiences in performance assessment, financial accounting, assets assessment, fund liquidation, etc.

, and built up sound corporate image. BOC would speed up to develop competitive products with high added value and actively provide local sectors with quality financial services. Under the model of trust, BOC, as a fund custodian, would not only provide social security fund with such services as collection and payment of funds, and agency and custody of bonds, but also provide basket services including trust management, investment management, etc.

According to the prediction of the World Bank, the accumulated balance of pension funds in China would clime up to RMB 13 trillion (USD 1.8 trillion) in 2030. The fund inflow every year would be up to RMB500 billion. Therefore, pension funds in China are confronted with the value-guaranteed and value-added pressure.

The management and operational mechanism of pension funds also needs to reform, and the tendency is to apply international practices by operating in the market in the form of trust funds. In 2004, Jilin Social Insurance Company launched the experiments in selected places of Connect the National Fortune and Benefit People s Life to improve the social insurance system concerning staff in cities and towns.

Rich experiences had been accumulated in this reform and interest adjustment, in which millions of employees were involved.

The signing of this custody agreement would provide more comprehensive system guarantee for Jilin Province in the management of personal accounting funds and provide experience references for the practices of personal accounting reform to be carried out all over the country. Meanwhile, BOC would take this opportunity to provide better services in the management and operation of local social security funds for the value-guaranteed and value-add targets, and to make contributions to the reform and development for pension in China.