The survival or abolition of the housing fund has once again become a hot topic in society. Some people believe that the housing provident fund system is unfair and that the housing provident fund has fulfilled its historical mission. In order to reduce the burden on enterprises, it is advocated that the housing provident fund be abolished.
In my opinion, the housing fund system is still valuable and should be retained.
System efficiency and fairness of housing provident fund
From the National Housing Provident Fund Annual Report 2018 published by the Ministry of Housing and Construction (MOH&C) on its official website, you can get a bird's-eye view of the system efficiency and fairness of the housing provident fund, and have a general understanding of the system. According to the PF "Annual Report", the system efficiency of the PF can be summarized into four features, and the system fairness can be summarized into four features. Look at the four features of the system efficiency of the Housing Provident Fund.
First, the benefit rate is relatively high. Since the establishment of the provident fund system, a total of 33.35 million individual housing loans were issued, of which one-third were for dual-income workers,**** benefiting about 55 million people. Of the 144 million paid-up employees, 38% have succeeded in becoming housing loan borrowers. The nature of the Housing Provident Fund system is a mutual assistance system. As a mutual aid system, 38% of its members can benefit, which is not a low percentage.
Second, the level of collateralization is appropriate and effective. 2.53 million individual housing loans were issued in 2018, amounting to 1.02 trillion yuan. On average, each housing loan is about 400,000 yuan. In second- and third-tier cities, a down payment of enough can basically solve the loan without combining other commercial loans.
Thirdly, it reduces the heavy interest burden for employees. Provident fund loans have a lower interest rate of 3.25% for a period of five years or more, which is 1.65-2 percentage points lower than the benchmark interest rate for commercial personal housing loans.The home loans issued in 2018 could save 202 billion yuan in interest expenses for employees who take out loans. On average, each loan can save 80,000 yuan in interest expenses based on a 10-year period.Over the past 20 years, the provident fund system has reduced the interest burden for employees by one trillion yuan, which is the vitality of the provident fund system.
Fourthly, the administrative costs come entirely from the management fees withdrawn. There are 342 provident fund management centers and 3,439 service outlets nationwide***. The National Provident Fund has 44,000 employees, 40% of whom are non-employees.In 2018, the withdrawn management fees amounted to 11.7 billion yuan, or 210,000 yuan per billion yuan of assets in comprehensive management costs, including salaries and bonuses for all employees, office accommodation, office equipment, and official expenses. The entire provident fund system is a self-supporting system. In national contributory welfare systems, such as the social insurance system, and even the National Council of Social Security Funds, the operating and management costs all come from financial funds, while the management costs of the housing provident fund system are completely self-absorbed.
Beginning with the National Housing Provident Fund 2018 Annual Report, let's examine four institutional equity features of the Housing Provident Fund.
The first is the gradual expansion of coverage. As of 2018, there were 144 million workers contributing to the provident fund. The coverage is relatively large in China's contributory welfare system. For example, in comparable social insurance systems, unemployment insurance covers 196 million people and maternity insurance covers 204 million people, except for healthcare and old-age pension, whose mandatory coverage is larger than that of housing provident funds. Some other contributory systems cover only a small proportion of the population. Enterprise annuities, for example, cover less than 24 million people.
Second, the structure of salaried employees is largely based on formal sector employment. Of the 144 million paid employees, 31% are institutional employees, 20% are state-owned enterprises, 31% are private enterprises, 8% are foreign-owned, and the remaining 10% are private enterprises, collective enterprises, and other types of units. Formal sector employment in China can be categorized into a narrow and a broad sense. In the narrow sense, it refers to urban legal organizations and urban collective units, which employ 170 million people; in the broad sense, there are 140 million urban private employees, that is, those employed by private enterprises whose business addresses are located in counties and cities. Unemployment insurance, work injury insurance and provident funds mainly cover
Third, the transparency of the system is excellent. The disclosure and transparency of the housing provident fund system has been relatively good.In 2015, the Ministry of Housing and Construction, the Ministry of Finance and the People's Bank of China jointly issued the Notice on Improving the Information Disclosure System of Housing Provident Funds. In addition, the National Housing Provident Fund Annual Report, which is jointly published by the Ministry of Housing and Construction, the Ministry of Finance and the Central Bank to the whole society every year, is complete and very transparent in terms of information. For example, among the contributory welfare systems in China, the transparency of the provident fund is the highest, such as the percentage of contributing employees by nature of units, provident fund withdrawals by type, various types of loans, pilot loans to support the construction of guaranteed housing, operational income and expenditure and value-added gains, distribution of housing loans and value-added gains by provinces, and asset risks.
Fourth, housing provident fund, as a kind of *** same fund, has played a threefold spillover effect on China's housing construction. First, it has taken a place in the housing market. For example, in 2018, the Housing Provident Fund housing consumption withdrawals issued a total of 2.2 trillion yuan in personal housing loans and public welfare loans, accounting for 17 percent of the country's commercial housing sales and 16 percent of the personal housing loan market. Another example is the support for loan employees to purchase and build housing of 287 million square meters, accounting for 19% of the national commercial housing sales. Secondly, it plays an obvious role in the rental market and housing repair market. The provident fund has supported employees who temporarily have no housing needs in terms of rental and housing repair needs, with 7.66 million rental workers withdrawing $73 billion, or $10,000 per capita in annual withdrawals. Third, it has played an important role in the construction of sheltered housing. The housing provident fund provides loan support for guaranteed housing construction projects. As of the end of 2018,*** loans of 87.215 billion yuan were issued to 373 pilot projects for sheltered housing construction. In addition, the value-added proceeds of some housing provident funds provide supplementary funds for urban public **** rental housing construction,*** arranging 336.5 billion yuan in public **** rental housing construction funds. For example, the Beijing Housing Provident Fund has so far issued 36 project loans amounting to 20.1 billion yuan, with a construction area of 940,000 square meters, potentially solving the housing difficulties of more than 90,000 families of low- and middle-income workers.
The mission of the housing provident fund is not completely over.
Judging from the efficiency and fairness of the provident fund system mentioned above, it has performed well, or at least not badly, among the many contributory welfare systems, and has played a role in the transformation of the housing system and in solving the housing difficulties of workers. In the coming period, the historical mission of the housing provident fund is not completed, mainly in the following aspects.
First, from the demand side, the housing fund can also play a role. In third- and fourth-tier cities, the role of the working class in alleviating housing difficulties is very obvious. The most telling is the housing loan ratio, which is the ratio of the year-end balance of personal housing loans to the year-end balance of housing fund deposits. For example, most provinces and regions in the central and western parts of the country have a mortgage rate of 70 to 80 percent, with only the west below 70 percent.
Tibet, Qinghai and the Xinjiang Construction Corps. First- and second-tier cities are almost always above 85 percent, for example, Beijing is 95 percent, Shanghai 96 percent, Tianjin almost 100 percent, and Jiangsu, Zhejiang, Anhui, Fujian and Guizhou are above 95 percent. Importantly, the first and second-tier cities, high housing prices, institutions and organizations hired every year to buy a house is too much pressure on the staff, and these groups are one in a hundred through the "National Examination" into the examination, they bear the function of the operation of the national machine, in the first line of scientific research and teaching, housing provident fund for their marginal utility is the highest, in the second and third-tier cities can be completely In second- and third-tier cities, they can completely rely on provident funds to solve the problem of home ownership. If the provident fund is abolished, it will mean a bigger obstacle for the central ministries or some departments to hire talented people.
Secondly, from the perspective of the pattern of China's initial income distribution, retaining the provident fund can increase the share of labor income. As we all know, in China's initial income distribution pattern, the share of labor income is too low. Since the reform and opening up, the indicator of labor income share has fluctuated, from more than 60% in the 1990s to slipping below 50% in 2008 before the international financial crisis, and then rebounded, and has improved in the past 10 years, but it is 15 to 20 percentage points lower than developed countries on average, and even lower than some developing countries.
The report of the 19th CPC National Congress clearly pointed out that "we insist on achieving simultaneous growth of residents' incomes while the economy grows, and simultaneous increase of labor remuneration while labor productivity increases". 2020 May 18th just released the "Opinions of the Central Government and the State Council on Accelerating the Improvement of the Socialist Market Economic System in the New Era" again pointed out that "we will continue to improve the socialist market economic system in the new era". The Opinions of the Central Government and State Council on Accelerating the Improvement of the Socialist Market System in the New Era," which was just released on May 18, 2020, once again points out that it is necessary to "increase the remuneration of laborers, especially front-line laborers, and raise the proportion of labor remuneration in the initial distribution, so as to achieve simultaneous growth of residents' incomes alongside economic growth, and simultaneous increase of labor remuneration alongside labor productivity."
From the perspective of implementing the spirit of the central government, the provident fund system would have been a good thing. Advocating the abolition of the provident fund is mainly for the consideration of reducing the burden for enterprises, the starting point is also good, but the key to the problem is that the focus should be on tax cuts and lower social security fees. China's tax revenue mainly from indirect taxes, direct taxes only account for about 10%, in the long term, should gradually to the direct tax tax revenue is mainly, but if the share of labor income is always too low, it will always be an empty word.
Thirdly, from the point of view of the workers' sense of gain, the effect of the provident fund is very obvious. When contributing to the provident fund, the people never complained that the base is too high, the ratio is too high, they complained that the social security fee rate and base is too high. The phenomenon of "fee evasion" by the people and enterprises in social security is very serious, while almost no one and enterprises in the provident fund "fee evasion"! Why? Because the provident fund "tax wedge" is "zero", 100 percent of the disposable income of employees and their families, private property is very obvious. Excluding CPF, the tax wedge of our social security contributions is as high as 30.81%, which is exactly equal to the average value of OECD countries. In comparison, the tax wedge of Denmark, a Nordic welfare state, is only 30.99%, which is only a little bit higher than ours. There are many developed countries with a lower tax wedge than ours, for example, there are Japan, Australia, Britain, Luxembourg, Ireland, Canada, the United States, New Zealand, Israel, Switzerland and so on.
Importantly, in the social security contributions of individuals and enterprises, the tax wedge of enterprises' contributions is as high as 19.22%, and the tax wedge of individuals' contributions and personal tax is 6.41% and 5.19%, respectively, that is to say, in the structure of the tax wedge, the social security contributions of enterprises accounted for as high as 62.36%, and such a large tax wedge is cut off from the interests of employees, and the enterprises certainly can be "The employees can not get the benefit, no sense of gain, of course, also willing to "cooperate" with the enterprises to evade the fees, so the formation of employees and enterprises "collusion", the whole country People together "escape" social security contributions has become a subterfuge, and ultimately "suffer" is the social security system. This is the main reason why contributing to a provident fund is more popular than paying social security contributions.
Fourthly, CPF accounts for 95% of borrowers in the middle and lower income brackets, and is particularly popular in poorer areas. One of the main arguments in favor of abolishing the CPF is the belief that the system is unfair and that the poor subsidize the rich.Of the 2.53 million home loans of $1 trillion issued in 2018, 95 percent of the borrowers were lower- and middle-income earners, with higher-income earners accounting for only 5 percent. According to the 2018 Annual Report of the National Housing Provident Fund (NHPF), low and middle income here means income less than three times the local average social wage of the previous year, and high income means income higher than three times the local average social wage of the previous year. Looking at the age and purchase of housing 76% of borrowers are under 40 years of age, 89% are purchasing a floor area of less than 144 square meters, and 85% are first home buyers. Obviously, these data show that home buyers are basically the new demand class, the provident fund system is a real protection and support for the middle and lower income groups to buy a home.
Re-use the contribution base of several typical poor areas in 2017 to see their attitudes and behaviors towards provident fundsGansu Dingxi's contribution base is 101% of its social wage, Guangxi Baise City is 110% of its social wage, and Gansu Zhangye's actual contribution base is the highest, 113% of its social wage. This shows that the contribution base of employees in poor areas is very "real", and even exceeds the local social wage, because they get benefits.
Fifth, the number of contributing employees is increasing, especially in the private sector. Let's look at the issue of fairness between "inside" and "outside" the system. In real life, this pair of concepts can be understood in two ways. One is that institutions and state-owned enterprises are regarded as "within the system", while others are regarded as "outside the system". Of the 144 million paid employees, 44.52 million are in institutions and 29.28 million are in state-owned enterprises, totaling 73.8 million, indicating that the number of paid employees within the system is basically in a "saturated" state. Another understanding is that "within the system" refers to the formal employment sector, and "outside the system" refers to the informal employment sector, while the formal employment sector has a broad and narrow definition. With institutions and state-owned enterprises basically in a saturated state, private enterprises will become the main force for current and future participation in the provident fund. For example, in 2018, 19.9 million new accounts were opened for the provident fund, of which private enterprises accounted for 50%, which suggests that the share of private enterprises is gradually increasing in the process of expanding the coverage in the future. In the formal employment group, it is unfair to employees who do not participate in the provident fund, but the expansion of coverage needs a process, the state has repeatedly issued documents in expanding the coverage of the provident fund, which requires employers and employees, as well as the whole society **** the same efforts, social insurance coverage has also gone through such a process. For example, the basic pension insurance for urban enterprise workers covered only 136 million people 20 years ago, while in 2019 it was as high as 967 million. But if the provident fund is abolished, both workers who are not enrolled and those who are already enrolled will be lost forever, and as long as the system exists, the opportunity exists.
The main problems of the housing provident fund system and reform proposals
The "Opinions of the Central Committee of the State Council on accelerating the improvement of the socialist market economic system in the new era", which was just released on March 18, 2020, points out that "the housing provident fund system should be reformed".
In my opinion, this is the most authoritative and latest tone of the central housing provident fund, the attitude is very clear, that is, "reform", and never what "cancel", I fully agree. Since the attitude of the central government is still clear, to reform, we should first make clear what the problems of provident fund are, and then discuss what the solution to the problem is, not what to take or not to cancel the problem, but to change or not to reform the problem. There may be many problems with the provident fund, such as whether older workers who have no need to buy a home have the right to withdraw, whether the individual worker has the right to choose the percentage of contribution within the ceiling, and so on.
But, the housing provident fund has been the existence of the biggest problem there are two one is a single means of investment, the rate of return is too low, for example, the value-added rate of return in 2018 is only 1.56%; value-added rate of return is too low directly leads to the consequences of the employee to pay the interest on deposits is too low, only by 1.5% interest. If the rate of return on market-based investments is used, the loss is huge. Taking the 2018 balance of 802.3 billion yuan as an example, if it is entrusted to the National Council of Social Security Funds to invest and assuming that the rate of return is calculated at 6%, the interest income for the year will be as high as 28 billion. So, over the course of two decades, the interest loss would be several hundred billion dollars. For individual employees, the 1.5% interest level is far from winning the inflation rate, the risk of depreciation is very obvious, the account of the funds contributed to watch the annual shrinkage; 1.5% interest level is lower than the average social wage growth rate of at least 10 percentage points, resulting in a "welfare loss" doubled every few years, in the past 22 years! In the past 22 years, the unit matching contribution is almost equivalent to "paying for nothing". In the past 22 years, the wage growth rate plus the population growth rate is more than 14%, which is the "biological rate of return", also called the "internal rate of return", minus the 1.5% interest rate level, the annual "welfare loss" should be at least 12%. Subtracting the 1.5% interest-bearing level, the annual "welfare loss" must be at least 12% or more, and over 22 years, the loss of employees' welfare is astronomical. From the perspective of society as a whole, this is a huge loss of social welfare and a "transfer" of social wealth. The second problem is that the level of coordination is too low, the loan rate of high and low regions can not be transferred between the use of surplus funds in the country, from the point of view of society as a whole, the level of management of funds is too low and regional fragmentation reduces the efficiency of the surplus funds of the "mutual aid".
In view of the above analysis, the provident fund system has a problem, but we can not eat for fear of choking, the existence of problems in the provident fund should be solved as soon as possible, can not turn a blind eye, otherwise it is the irresponsibility of the contributing workers, from a certain point of view, it is the price of low quality assets, "fattening" the state-owned banks. Since some scholars have put forward the abolition of the provident fund motion, policymakers should have a sense of urgency, holding a high sense of responsibility for the interests of the people to act as soon as possible, do not let a very good livelihood system for a long time to become a "soft underbelly". In order to cut off the above two major shortcomings, the author puts forward four reform ideas or four reform options.
First, expand the functions and optimize the structure of the housing fund center without changing its current nature as an administrative unit. This is an improved program, is the easiest and most convenient program, the existing institutional mechanism does not make any changes. The areas of "improvement" include, in terms of the investment system, adopting the model of entrusting the investment of the basic pension fund for urban workers to the National Council of Social Security Funds (NCSSF), with each province signing a contract with the NCSSF and agreeing on the rate of return on the investment and other specifics, and with the real investment income distributed to the contributing employees in full as interest. In terms of business scope, the provident fund centers in first- and second-tier cities are allowed to use the value-added income and other funds to directly invest in rental housing holdings, and to support contributing employees in solving their housing problems through leasing; to expand the coverage of contributions to cover urban workers, even freelancers, and other groups of people; to upgrade the level of coordination to national coordination, strengthen the mutual integration of funds among cities, and allow contributing employees to continue their contributions in different places, withdraw from different places, use, and borrow; to withdraw and use the funds; and to withdraw and use the funds. In terms of withdrawal and use, a new loan allocation mechanism will be established, tilting towards the middle and low-income groups and increasing support for rental housing; in terms of operational mechanisms, efficiency will be enhanced and procedures for withdrawal and use will be simplified; and in terms of supervision, public disclosure in accordance with the law will be strengthened and information will be disclosed on a regular basis.
Second, the reorganization of the establishment of the national independent legal person policy non-bank financial institutions "national housing fund management company". The National Housing Provident Fund Management Company issues bonds and securities in the capital market on the basis of national credit, so as to enlarge the capital pool and provide liquidity support and policy guarantees for the use of housing provident funds by the general public; in the use of funds, the National Housing Provident Fund Management Company does not issue loans directly, but rather supports the basic housing needs of contributing employees by providing them with low-interest, long-term credit guarantees, and the employees can choose to use the guarantees of the Fund Management Company to finance their housing needs. After receiving the guarantee from the CPF Management Company, the contributing employee can choose any CPF center and commercial bank to obtain a loan. This method can promote competition between the provident fund centers and commercial banks and enhance the efficiency and service level of the contributing employees in obtaining housing loans. At the same time, the National Housing Provident Fund Management Corporation (NHFMC) provides a steady stream of funds to CPF centers and commercial banks by acquiring their home mortgage assets in bulk. In first- and second-tier cities with high housing prices, it supports the construction and operation of rental housing through loans or direct investment to promote "rent and purchase". The establishment of a national coordination mechanism and a national housing fund fund management platform, to realize the national common deposit and exchange and interbank lending; in terms of operational and regulatory mechanisms, in accordance with the corporate governance structure of financial institutions to operate, and be subject to supervision.
Third, the reorganization and establishment of a policy-oriented national housing bank. This is based on the model of housing savings banks in developed countries, the National Provident Fund Center will be reorganized into a unified independent legal person financial institution in the country, and the provincial and municipal provident fund centers will be reorganized into branches of the National Housing Bank, and will issue bonds and securities on the capital market with the credit of the state; carry out policy housing savings business, establish a differentiated credit mechanism, and provide more preferential housing financial support to the low- and middle-income groups The bank has established a differentiated credit mechanism to provide more favorable housing finance support to low- and middle-income groups, allowing them to make deposits in different places, and to make withdrawals and use and take out loans in different places; it has also issued project loans for rental housing construction. In the operation mechanism in accordance with the modern corporate governance structure of financial institutions, the establishment of incentive mechanisms to promote efficiency and risk control; in the regulatory mechanism in accordance with the regulatory mechanism of policy-based finance, the Ministry of Housing and Construction is responsible for the development and supervision of housing policy rules, the central bank, CBRC is responsible for the development and supervision of the banking industry regulatory rules.
Fourth, merge with enterprise annuity and integrate into a comprehensive provident fund system. Taking into account the aging trend, following the principle of the whole life cycle, and taking into account the needs of urban residents in the two aspects of housing and pension funds, the establishment of a unified personal provident fund account in the country brother. Two sub-accounts will be set up for housing and old-age pension; housing accounts will be "low deposit, low loan", and funds from housing accounts can be withdrawn and utilized for renting or purchasing housing; when employees have no provident fund loans or housing consumption needs, funds from the housing account will be transferred to the old-age pension account. The establishment of policy non-banking financial institutions, unified responsibility for the investment operation of the integrated provident fund pool, to play the dual role of the current housing provident fund and enterprise annuity.
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Related Q&A: related Q&A: please ask the housing mortgage loan into a business commercial loan, the interest rate from 5.6 to 3.8, transferred what are the disadvantages and not the same?Any fool knows that a loan at 3.8% is a better deal than a 5.6% rate. And the 5.6% rate is a mortgage rate -- equal principal or equal interest -- with a true APR of about 8% annualized! -- so many owners convert their 5.6 percent loans to 3.8 percent loans.
Flying Dagger has been a small bank lender for more than 20 years, and tells you about the problems.
1, 5.6% is a mortgage, 3.8% is a business loan - the nature is not the same
Mortgage is a consumer loan to buy a house, as long as you have the ability to repay the loan, buy a house can be done mortgage - pay attention to the borrower here, identity! can be office workers, wage earners, bosses and so on.
The business loan is a business loan - the identity of the borrower must be the boss, or shareholders, legal representatives, etc.. --Workers and office workers are not eligible for business loans.
Note - some banks are lax in auditing, temporary shares, you can apply for 3.8% business loans - once the policy is tightened or inspection, there is a possibility that the business loans are immediately withdrawn!
2, the materials provided are different
Mortgage loans - to provide personal data, proof of income, running water and other materials.
Business loans - in addition to personal materials, but also to provide business materials (business license, office lease, upstream and downstream contracts, business flow and so on)
3, the order of property collateral is different
Mortgage loans - the collateral is the purchase of the house, the collateral is the purchase of the house, the collateral is the purchase of the house, the collateral is the purchase of the house. -Collateral is the purchase of the house, the first-hand house developers will assume the stage of guarantee, generally the first lending, after out of the house, and then for mortgage. Second-hand housing transactions are, first down payment, closing, mortgage and then release the money to the seller of the house.
Business loans - must be mortgaged before lending.
So buying a primary home can't be made directly into a business loan.
4, the term is different
Mortgage is usually 20 or 30 years repayment.
3.8% of the business loan is a yearly repayment - note that many banks have introduced a "non-repayment of the loan" - for example: 10-year 5 million business loan The amount of money, a withdrawal of 5 million, a year expires, the expiration of the procedures directly to extend another year, until the expiration of the 10-year limit.
The business loan can be renewed without repayment, but there will be a brief audit every year, in case it does not pass, it must be repaid.
5, different ways of using money
Mortgage loans, the bank directly lends money to the developer or seller.
3.8% business loans, lending can only go to the business counterparty, if it is real for the purchase of real estate, certainly to do a fake contract, the need for counterparties to cooperate with the collection, the middle is bound to have risk.
6, suitable for 5.6% into 3.8%
Originally, the borrower is the boss, there would have been a company, would have been able to do business loans.
The boss could have paid off the 5.6% loan, and then used the house to go to the bank to mortgage for a 3.8% business loan.
Some people ask? --What if the 3.8% loan is not approved? --It's simple, you can let the bank approve the 3.8% interest rate business loan first, and then repay the 5.6% mortgage after the loan approval, which is foolproof.
Lastly, the flying dagger in Beijing, a bank work, Beijing regulation on the use of business loans to purchase a house management is strict, the new purchase of the house can not be mortgaged to do business loans. And will use big data to compare the operating loan and home buyer information, compared to the success will be traced.
As for the 3.8% interest rate, it's not the lowest - Beijing's "Business Guarantee Loan" 2021, without collateral, is only 2.35% per annum, and the amount of money is up to 3 million - the government is really making great efforts to help small and medium-sized enterprises. The government really supports small and medium-sized enterprises (SMEs) vigorously.