According to the Toronto Globe and Mail, the enterprise annuities resemble 401(k)-type plans in the US and the Chinese government hopes that such plans can fend off a retirement crisis in China.
Sun Life research says the market for enterprise annuities is at $13 million but they forecast a climb to about $55 billion over the next four years, a figure that would tower above China’s $25-billion fund, created to make up for pension shortfalls, according to the Canadian paper.
The annuities will be sold through the group’s banking arm, China Everbright Bank.
“The government is very much encouraging corporations to form these programs to help support the pension reform,” said Janet De Silva, president and CEO of Sun Life Everbright Life Insurance Co. The insurer’s 50-50 joint venture with China Everbright Group means that Sun Life will distribute the products through the bank’s 370 branches.
According to the newspaper, Sun Life has made an exception by allowing banks to sell insurance products through their branches in China, which has helped make Sun Life among the top 15 insurers in the country.
“In the Chinese market, the competition in the life insurance industry is very fierce,” Xu Bin, the chairman of Sun Life Everbright and former head of China Everbright Bank told the Canadian newspaper.