Reuters Builds New Pension Index to Support China's Investment Management Community

RCPI measures the investment performance of China's EnterpriseAnnuity (EA) system. This EA system, comprised of voluntarycontribution pension plans, is part of the three pillars of theChinese pension system. Reuters move to build the new pension index istimely as China continues efforts to diversify the country's nationalpension fund following the latest step towards allowing corporatepension funds to invest in China's stock markets.

Alex Hungate, Reuters Asia Managing Director said: "Pension reformis essential to long term prosperity in China. Reuters is the first toprovide market participants with an industry benchmark that thepensions industry can use to judge performance of enterpriseannuities."

Reuters built the Pension Index in response to a strong demandfrom both local and foreign investors for benchmark indices on thedeveloping pension industry in China. Market participants need toassess their portfolio management performance and governmentregulators need to measure the progress and development of itsenterprise annuity system.

The enterprise annuity market is expected to grow exponentially to60 billion USD in the next five years compared with 11 billion USDnow. As the EA market is expected to invest heavily into the fundsmarket, Reuters has plans to provide enhanced asset management contentand services to support the need for investment of annuities in China.

"China has recently allowed insurance companies to invest inoverseas listed Chinese securities and is now studying the possibilityof allowing the national pension fund to diversify in a wider range ofassets abroad. With the launch of the Reuters China Pension Index,Reuters is well prepared to meet the demand for benchmark indices thatthese changes will create," said Serena Wang, Managing Director inReuters China.

As China's asset management market expands, Reuters is set todevelop a series of EA indices based on China market environment,investment guideline from regulatory agencies, and requirements forperformance measurement. In developing these indices, Reuters hasconsulted with relevant regulatory agencies as well as sought marketvalidation from participants, including asset managers, trustees,administrators and custodian banks.

The RCPI is advised by an Index Committee comprised of Reutersrepresentatives and independent advisors, including industrypractitioners and academics. It is the responsibility of the Committeeto advise on all matters relating to methodology and maintenance ofthe RCPI, assuring that the RCPI reflects changes in the market andremains of maximum value to users.

China granted licences to 29 financial institutions to managecorporate pensions last August. Four of the firms are part-owned byDeutsche Bank A.G., Fortis, Morgan Stanley and Bank of Montreal. Inthe next 10 years, the total Asset Under Management in China is set tosurge to almost 3 trillion USD from about 340 billion USD. In all of2005, China drew $60.3 billion in actual Foreign Direct Investment(FDI), against $60.6 billion a year ago.

Note to editors

Reuters China Pension Index (RCPI) - Overview

The Reuters China Pension Index (RCPI) is the benchmark index forthe investment performance of China's Enterprise Annuity system,comprising voluntary defined contribution pension plans which werelaunched in early 2006.

About Reuters

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