The General Office of the Ministry of Human Resources and Social Security ("MOHRSS") and the General Office of the Ministry of Finance ("MOF") have recently distributed the Circular on Regulating Matters Concerning the Administration and Operation of Occupational Annuity Funds (the "Circular").
The Circular explicitly states that each place shall establish an account at the corresponding level to collect the occupational annuity funds in strict accordance with applicable rules, and occupational annuity funds must be collected under custody throughout the whole process. All levels of social insurance institutions shall not establish the account of payments from occupational annuity funds. However, where an account of payments from occupational annuity funds has been established before the date when this Circular is released, the social insurance institution concerned shall cancel such account immediately once an occupational annuity scheme has been ready and is officially used to invest in operating occupational annuity funds, and go through formalities to file a record for the cancellation of account. Moreover, the Circular notes that where it is of necessity to entrust a third-party agency to provide advisory services for selecting a manager for the occupational annuity scheme, both parties concerned must enter into an entrustment agreement to specify what affairs are entrusted, rights and obligations of each party, methods of payment, source of expenditures, etc., and relevant costs shall not be itemized in any form under the property of occupational annuity funds.