2015 Annual Report on Shanghai Housing Provident Fund
We hereby release 2015 Annual Report on Shanghai Housing Provident Fund as follows in accordance with the state council’s Regulations on Management of Housing Provident Fund and Notice of MOHURD, MOF and PBOC on Improving Housing Provident Fund Information Disclosure System (JJ No. 26-2015), in wake of deliberation and approval of Housing Providnt Fund Management Committee of this Municipality:
1. Institutional Profile
(1) Housing Provident Fund Management Committee: Shanghai Housing Provident Fund Management Committee (hereinafter referred to as “the Committee”) consists of 21 members. In 2015, the Committee convened five meetings, and reviewed and approved Report on the Municipality’s 2014 HPF Plan Execution and 2015 HPF Plan Arrangement, Report on Proposals for Agreement on 2014-2015 Commissioned HPF Services, Report on Easing the Municipality’s HPF Home Loan Caps, Notice on Further Easing Criteria for Rent Payment Oriented HPF Withdrawal in this Municipality, Report on Launch of 2015 Administrative Enforcement Inspection of HPF Payment of the Municipality, Report on Explanatory Remarks to Notice on Adjustment of Shanghai Housing Provident Fund payment base £ŠUpper and Lower Limits of Monthly Payment Amounts for Fiscal Year 2015, Report on HPF Home Loans Risk Management Measures, and Proposals for Launch of HPF Home Loan Asset Securitization Pilot Projects in Shanghai; and briefed on Relevant Methodological Approaches in Shanghai Housing Provident Fund System’s Deep Reform and Innovation Drive, Schematic Measures on Further Improving and Perfecting the Municipality’s Housing Provident Fund Payment Means, and Proposals for Development and Construction of the Municipality’s Housing Provident Fund Core System.
(2) Provident Fund Management Center: Shanghai Provident Fund Management Center (hereinafter referred to as “the Center”) is a nonprofit institution directly subordinate to the municipal government, mainly in charge of the Municipality’s housing provident fund gathering, withdrawal, use, value preservation and accounting. The Center currently has 13 functional departments, comprising Party Committee’s Office (concurrently the organization & personnel office), General Office(Office for Letters and Calls), Policies & Regulations and Risk Management Department, Fund Planning Management Department, Lending Management Department, Fund Gathering Management Department, Discipline Inspection and Auditing Department, Operational Accounting and Information Department, Scien-Tech Support andl Development Department, Service Management Department, Internet Development Department, Law Enforcement Supervising Department, and Project Management Department; and 17 districts/county management divisions, with a staff of 263 employees.
2. Operation of Services
(1) Payment:One bank is commissioned to handle housing provident fund payment service in this Municipality. In 2015, housing provident fund paying entities totaled 0.2699 million, and newly registered paying entities 65,500, indicating a net increase of 59,800 entities from the previous year. Paying employees totaled 7.1436 million, and newly registered paying employees 0.8961 million, with a net increase of 0.5152 million from the previous year. Total payment amounted to 88.096 billion yuan, up 11.96% year on year. As of end of 2015, payment amount aggregated 609.656 billion yuan, with a payment balance of 282.257 billion yuan, up 16.89% and 15.11% year on year respectively.
(2) Withdrawal: The year’s housing provident fund withdrawals recorded 51.048 billion yuan, accounting for 57.95% of the annual payment amount, up 1.12 percentage points from the previous year. As of the end of 2015, the aggregate withdrawal recorded 327.399 billion yuan, up 18.47% year on year.
(3) Loans
1) HPF Home Loans: The Municipality’s home loan cap is one million yuan (or 1.2 million yuan for additional provident fund paying employees), namely, the loan cap for a one-borrower family is 0.5 million yuan (or 0.6 million yuan for an additional provident fund paying employee), and the loan cap for a two(or above)-borrower family household is one million (or 1.2 million yuan for additional provident fund paying employees). Altogether 18 commercial banks are commissioned to handle housing provident fund home loan services.
Altogether 199,600 home loans were issued in the year, amounting to 119.287 billion yuan, up 64.28% and 152.62% respectively. Home loan repayment collection totaled 36.293 billion yuan. Home loans transferred due to asset securitization amounted to 7.186 billion yuan. As of end of 2015, the Municipality’s cumulative home loans issued recorded 2.155 million, amounting to 528.823 billion yuan, with a loan balance of 277.008 billion yuan, up 10.20%, 29.13% and 37.68% year on year respectively.
2) HPF Loans in Support of Security Housing Projects: Housing provident fund loans issued for security housing projects in the year amounted to 407 million yuan. The loan principal payables totaled 4.874 billion yuan. The loan principals actually collected recorded 5.244 billion yuan. As of end of 2015, the cumulative project loans issued amounted to 9.261 billion yuan, and the balance recorded 731 million yuan.
(4) National Debt Purchase: No national debt was purchased in the year. The year-end national debt balance recorded zero.
(5) Fund Deposits: As of end of 2015, the balance of fund deposits registered 4.17 billion yuan, including zero demand deposit, zero time deposits with a term within one (incl.) year, 2.456 billion yuan of over one year term deposits, and 1.714 billion yuan of miscellaneous deposits (such as negotiated deposits, agreement deposits and notice deposits).
(6) Miscellaneous: As of end of 2015, the fund utilization rate was 98.40%, up 14.08 percentage points from same period of the previous year.
3. Main Financial Data
(1) Services Revenues: Annual housing provident fund services revenues totaled 11.492 billion yuan, up 1.57% year on year, comprising 1.657 billion yuan deposit interest income, 9.685 billion yuan commissioned loans interest income, and 150 million yuan miscellaneous income.
(2) Service Expenditure: Annual housing provident fund service expenses totaled 3.285 billion yuan, up 42.53% year on year, comprising 2.40 billion yuan interest expenses for paying employees’ account balance, 187 million yuan collection commission fees, 394 million yuan fees for commissioned loans, and 304 million yuan miscellaneous expenses (including 232 million yuan service expenses for asset securitization).
(3) Value-Added Proceeds: Annual housing provident fund value-added proceeds totaled 8.207 billion yuan, up 46.61% year on year. The rate of return on value-added proceeds recorded 3.10%, up 0.65 percentage point from same period of the previous year.
(4) Allocation of Value-Added Proceeds: Annual withdrawal of loan risk reserve fund recorded 4.673 billion yuan, the withdrawal of overhead expenses 100 million yuan, the withdrawal of overhead expenses delivered to local finance bureau 100 million yuan, and the withdrawal of supplementary fund for construction of urban low-rent housing (public rental housing) 3.434 billion yuan.
Measures were taken to adjust allocation of 2014 value-added proceeds in accordance with the resolutions of the 49th meeting fo the management committee, namely, an additional 3.32 billion yuan home loan risk reserve fund, tantamount to 60% of the 2014 value-added proceeds, was accrued, simultaneously cutting back on the supplementary fund for construction of urban low-rent housing (public rental housing) by 3.32 billion yuan, with an additional 38 million yuan home loan risk reserve fund and an additional 28 million yuan supplementary fund for urban low-rent housing (public rental housing) construction due to actual accounting adjustments for the previous year.
As of end of 2015, the balance of the loan risk reserve fund recorded 22.962 billion yuan, and the balance of the supplementary fund for urban low-rent (public rental housing) construction 14.897 billion yuan. The cumulative supplementary fund for urban low-rent housing (public rental housing) construction turned over recorded 366 million yuan.
(5) Overhead Expenses: Annual overhead expenses totaled 93 million yuan, up 10.06% year on year, comprising 47 million yuan staff expenses, 10 million yuan public expenses, and 36 million yuan special expenses.
4. Asset Risks
(1) Home Loans: As of end of 2015, default home loans recorded 24 million yuan, with a delinquency rate of 0.086‰. As for annual home loan risk reserve fund, 60% of the value-added proceeds was withdrawn. The year-end balance of home loan risk reserves was 22.933 billion yuan. The percentage of home loan risk reserve fund balance to home loan balance recorded 8.28%. The percentage of the default home loans amount to home loan risk reserves balance recorded 0.10%. Default home loans risk reserve appropriation coverage rate indicated a 2.1-fold rise from the previous year.
(2) Housing Provident Fund Loans in Support of Security Housing Construction: As of end of 2015, no default project loans was discovered. The project loan risk reserves accrual accounted for 4% of the loans balance. The annual use of project loan risk reserve fund for default loan write-off registered zero. The project loan risk reserves fund balance recorded 29 million yuan.
(3) Risk Assets Left Over by History: As of end of 2015, no risk assets left over by history was discovered.
5. Social and Economic Benefit
(1) Payment: Growth rates of the number of actual housing provident fund paying employees and the payment amount in 2015 recorded 7.77% and 11.96% respectively. The actual paying employees consist of the following:
In terms of entity types, employees of state organs and institutions accounting for 10.04%, employees of state-owned enterprises 15.08%, employees of urban collective enterprises 2.37%, employees of foreign-invested enterprises 18.84%, employees of private enterprises and other enterprises in urban areas 50.92%, private non-enterprise entities and associations 0.72%, and miscellaneous 2.03%.
In terms of income levels, low-income employees accounting for 56.69%, medium level income employees 34.24%, and high level income employees 9.07%.
(2) Withdrawal: In 2015, 16.862 million hpf withdrawals recorded a total amount of 51.048 billion yuan, comprising housing consumption oriented withdrawals, accounting for 78.05% (8.37% for purchase, construction, rebuilding and major overhaul of homes, 68.81% for repayment of principals and interests on home purchase hpf and commercial bank loans, 0.86% for rental housing, 0.01% for miscellaneous), non housing consumption type withdrawals 21.95% (17.75% for retirement and honoured retirement, 0.01% for termination of labour contract with the entity due to total loss of ability to work, 3.51% for domicile relocation to other cities or emigrating abroad, 0.68% for miscellaneous).
(3) Loans
1) Home Loans: In 2015, housing provident fund home loans aggregated purchasing of homes equivalent to 17.1747 million square meters. Home loans market share reached 33.57%, up 4.93 percentage points from same period of the previous year. The year’s housing provident fund home loans, as per the signed contracts and based on the prevailing interest rates, would significantly reduce the home purchase loans applicants’ interest expenses by 25.42 billion yuan.
By area, of the purchased homes, 68.07% are below 90 (incl.) square meters, 27.29% greater than 90 square meters and less than 144 (incl.) square meters, and 4.64% over 144 square meters. Among them, newly built residences account for 29.06%, and second-hand homes 70.94%.
2) HPF Loans in Support of Security Housing Construction: Altogether 15 hpf loans aided security housing pilot projects, involving the issuance of 9.261 billion yuan worth of loans, were launched in the Municipality, comprising 1.771 billion yuan for the three joint-ownership security housing projects, 5.179 billion yuan for the nine relocation housing projects for shanty towns reconstruction and 2.311 billion yuan for the three public rental housing projects, bolstering the construction of a total buidling area of 2.299 million square meters, to the benefit of 28,100 needy employee families. As of end of the year, the loans for the 12 pilot projects had been issued and paid off.
4) Housing Contribution Rate: In 2015, the Municipality’s housing provident fund stepped up efforts to support paying employees’ housing consumption. Annual housing contribution rate (percentage of the sum of the year’s home loans issued, project loans issued and withdrawals due to housing consumption to the year’s payment amount) hit 181.10%, up 76.33 percentage points from same period of the previous year.
6. Other Major Issues
(1) System Innovation
To respond to the call of the central government for ensuring growth, promoting reform, making structural adjustment and improving people’s well-being and further give play to the functioning of housing provident fund to better meet the demand of paying employees for housing consumption, and act in accordance with the resolutions of Ministry of Housing and Urban-Rural Development, Ministry of Finance and the People’s Bank of China requiring cities with favorable conditions to actively advance housing provident fund loan asset securitization in an effort to make good use of housing provident fund loan assets, Shanghai Provident Fund Management Center has vigorously probed into mortgage-backed conduit securitization for pooling new capital from the market to push ahead with the sustainable development and advancement of the housing provident fund cause. The shgjj 2015-1 mortgage asset backed security number one and number two was successfully rolled out on 8 December 2015 after approval by Ministry of Housing and Urban-Rural Development and the People’s Bank of China, epitomizing the success in innovation of housing provident fund in launching the mortgage asset backed securitization in the interbank market. The issuance resulted in an aggregate pool of RMB 6.963 billion yuan, as the new source of funding for housing provident fund home loans.
(2) Policy Adjustment
1) Adjustments were made to hpf loan caps and payback period. As of 15 April 2015, the Municipality’s upper limit for hpf loans was adjusted. After adjustment, the upper limit for mortgage loans for purchase of first suite self-occupying housing or second suite improvement oriented ordinary commercial housing is one million yuan (or 1.2 million yuan for additional provident fund paying employees); and the maximum amount of hpf loans for purchase of second suite improvement oriented non ordinary housing is 800,000 yuan (or one million yuan for additional provident fund paying employees). Below is an illustration of these adjustments to the loan caps:
Home Purchasing | first suite self-occupying housing or second suite improvement oriented ordinary commercial housing | second suite improvement oriented non ordinary housing | ||
Number of borrowers in a family | One borrower | Two or more borrowers | One borrower | Two or more borrowers |
HPF Loan Cap | 500,000 yuan | One million yuan | 400,000 yuan | 800,000 yuan |
Additional HPF Loan Cap | 100,000 yuan | 200,000 yuan | 100,000 yuan | 200,000 yuan |
Maximum Loan Amount | 600,000 yuan | 1.2 million yuan | 500,000 yuan | One million yuan |
Adjustment to payback period of provident fund mortgage loans to second-hand housing purchasers: As for a provident fund mortgage on a second-hand residential property equivalent to or less than five years old, the upper limit of 30 years on the payback period remains intact. As for a provident fund mortgage on a second-hand residential property six up to nineteen years old, the upper payback period limit is set to be the difference between 35 (years) and actual lifespan of the residential property, instead of the previous 15 years. As for a provident fund mortgage on a second-hand residential property equivalent to or over 20 years old, the payback period must not exceed 15 years.
2) Adjustments were made to hpf deposit and loan interest rates. HPF home loan interest rates were adjusted four times in the year in accordance with relevant notices of the People’s Bank of China on interest rates adjustment, so that the interest rate on a personal housing provident fund loan over five years was lowered from 4.25% to 3.25%, and the interest rate on a five-year personal housing provident fund loan or a personal housing provident fund loan less than five years from 3.75% to 2.75%. After HPF deposit interest rates were adjusted five times, deposit interest rates for personal housing provident fund collected in the current fiscal year remained unchanged at 0.35%, and deposit interest rate for personal housing provident fund balance carried forward from previous fiscal year is lowered from 2.35% to 1.10%.
3) Adjustments were made to policies pertaining to rent payment oriented withdrawal. As of 1 May 2015, new withdrawal policies debuted for further easing criteria for rent payment oriented HPF withdrawal in this Municipality, so as to enable both the employee and the spouse to withdraw their housing provident fund for purpose of rent payment on condition that they made at least three consecutive months’ adequate housing provident fund payment and neither of them had self-owned or rental housing in the city where their personal hpf accounts were located. For a public rental housing lessee, the amount of hpf allowable for withdrawal was equivalent to the actual rent. For a lessee of any other type of housing, the hpf withdrawal cap was set at 2000 yuan per family per month and the withdrawal amount should be within the range of the actual monthly rent payment.
4) Adjustment of Shanghai housing provident fund payment base and upper and lower limits of monthly payment amounts for fiscal year 2015: As of 1 July 2015, employees’ housing provident fund payment base was adjusted from average monthly salaries of 2013 to average monthly salaries of 2014. For fiscal year 2015, the upper limit of housing provident fund monthly payment amount was 2290 yuan, and 3924 yuan was set as the upper limit of the housing provident fund monthly payment amount for owners of individual industrial & commercial household businesses in urban areas and their employees as well as freelancers. For fiscal year 2015, the lower limit of the housing provident fund monthly payment amount, based on the payment rate of 7% for both the unit and the employee, was 254 yuan, with the lower limit of the housing provident fund monthly payment amount for owners and employees of individual industrial & commercial household businesses in urban areas as well as freelancers set by reference to this standard level. The payment rates of employees and units for the municipal housing provident fund and the additional housing provident fund in fiscal year 2015 remained the same, namely, the payment rates for the housing provident fund both being 7%, and the payment rates of employees and units for the additional housing provident fund ranging from 1% to 8%.
5) Adjustments were made to operational procedures for ratifying the number of suties as criteria for eligible housing provident fund loan applicants regarding marriage-oriented home purchase, to improve operating process, further increase working efficiency and facilitate procedures to lessen borrowers’ commute times. Relevant adjustments were made to cancel the reconsideration process for ratifying the number of suites of an eligible housing provident fund loan applicant in respect of marriage-oriented home purchase by incorporating it in the general lending criteria. The criteria for ratifying the number of suites under the name(s) of a housing provident fund loan applicant’s family remained unchanged.
(3) Accomplishments in Payment Coverage Expansion and Law Enforcement Drive
1) Multiple measures were taken for further expansion of provident fund system coverage, comprising extensive coalition with various units such as China Construction Bank and the trade union for joint effort to increase payment coverage expansion capability, advancing housing provident fund system coverage of rural employees (with rural household registration) in environmental sanitation system and some state-owned enterprises in this Municipality, adoption of the innovated monitoring method of “three rounds of notification plus one round of onsite checkup” for attainment of targeted inspection, formation of law enforcement inspection team comprised of relevant personnel such as members of the municipal housing provident fund management committee and the municipal trade union and conducting onsite law enforcement inspection, with participants invited from various media tracking and reporting and arousing positive social repercussions, and utilization of the municipal credit information platform for exposure of the nonconforming entities declining to take corrective actions, in a bid to increase the cost for committing violations and enhance self awareness and willingness to pay housing provident fund.
2) Sustained effort was made to ramp up law enforcement for safeguard of housing provident fund paying employees’ legitimate rights and interests. In the year, 10 unregistered entities received “Administrative Penalty Decision”, 73 entities received “Notice on Requiring Mandatory Remedial Actions to Make Payment within the Prescribed Time Limit”, and 18 entities received “Notice on Requiring Mandatory Remedial Actions of Payment Registration and Account Establishment within the Prescribed Time Limit”. Altogether 45 cases were appealed to the people’s court for compulsory enforcement.
(4) Service Improvement
1) Efforts were made to proactively promote the internet plus mode of service for higher rate of online services (off-the-counter rate). SPF WeChat Account was launched to provide alternative service channels for queries of provident fund account, information and service outlet traffic status. Measures were taken to promote the mode of online monthly payment and paying arrears as well as the online payment base adjustment service, and advance the ATM-aided housing provident fund query self service development so that altogether over 5000 self-service kiosks of China Construction Bank, Shanghai Rural Commercial Bank, Shanghai Pudong Development Bank, Shanghai Bank and China Bank of Communications became available.
2) A slew of measures were taken to better the environment of service outlets and improve user experience, with completion of the relocation of Minhang, Pudong, Yangpu and Songjiang management divisions, and expansion of the offices and service halls of Xuhui and Baoshan management divisions.
3) Relevant actions were taken to deepen information sharing between various government departments for service upgrade and efficiency, particularly the interfaces with the municipal public credit information service platform, the municipal civil affairs bureau and the municipal human resources and social security bureau, and further information sharing in property ownership, marital status and subsistence security. A linkage mechanism for special inspection and auditing was established, facilitating service process and improving service quality by means of making data information travel more instead of the clients.
(5) Information Technology Development
The first measure was to concentrate on improving information system security for prevention of risks. A cyber information security steering committee was established, reinforcing security of the system and applications based on security assessment, requesting Shanghai Information Security Testing Evaluation and Certification Center and National Internet Emergency Response Center to conduct regular security scanning of our housing provident fund comprehensive system platform, embarking on comprehensive implementation of the third level classified security of the core system for fulfillment of the revision of the relevant security system within the year.
The second measure was to start construction of the new core system with an aim to transform into autonomous accounting. An information system innovation task force was formed. The project had passed the project initialization procedure in principle after reviewed by the municipal development and reformation commission, in wake of prerequisite activities such as research and planning, compiling of project construction documentation, experts’ review and submission for approval. The development of the core system is essential and indispensable for transformational development of the Center.
2015 saw the closing of the 12th Five-Year Plan. During the 12th Five-Year period, the Center kept tabs on its key targets, focused on improvement of people’s livelihood by upgrading its services and management and preventing risks, and surpassed all of the main targets and tasks addressed in the housing provident fund’s 12th Five-Year Plan for Development.
2016 embraced the opening of the 13th Five-Year Plan. It is a critical year for major reformation of the housing provident fund system, with the Center facing the challenge for supply-side structural reform. The Center, under the guidance of the resolutions of the Fifth Plenary Session of the 18th Committee of the CPC, the central government’s economic working conference and the Municipality’s 13th Five-Year Planning, shall redouble its efforts to delve into reform and innovation for transformational development, fully comply with new requirements for housing provident fund system reform, and give better play to the housing provident fund system in shoring up security housing, promoting housing consumption, improving employees’ housing situation and propelling social and economic development in a stable and healthy way.
Shanghai Provident Fund Management Center
March 2016
