(Xinhua)
Updated: 2007-10-18 07:03

BEIJING -- The China Insurance Regulatory Commission (CIRC) has scrapped the requirement for pension firms to open branches in the provincial regions outside their headquarters to operate corporate pension business.

The move was aimed to "improve the market environment for pension companies", said a circular released by the CIRC.

China's corporate pension market has attracted many institutional investors as its value has swelled from 91 billion yuan to 120 billion yuan in less than a year.

Pension companies competing in this market, however, lack nationwide networks due to a later start compared with other institutional investors, such as insurance and fund companies.

The CIRC exemption would improve their status in the market because they would only need permission for operation before entering the market, said analysts.

China has five pension companies which are headquartered in large cities like Shanghai and Beijing.

The corporate pension scheme is a formal arrangement between a company and its employees on a voluntary basis. It is a supplementary to China's basic pension system which is still in transition.

The basic structure of the revised system is a mandatory two-pillar pension comprising a "social pension" financed by employers plus "individual accounts" funded by both employer and employee contributions.

Under Chinese law, a company can either organize an in-house council or hire a pension company to manage corporate pension funds.