China population: a private pension plan is coming, but will people carve out a piece of their savings?

For the first time ever, tax deductions will be available on personal pension contributions, to encourage participation in the coming private pension system

Private scheme will be rolled out with one-year trials in some cities before being implemented nationwide

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Beijing has unveiled a private pension scheme that will let people save funds in pension accounts, invest in financial products and better prepare for retirement. Photo: AFP

Published: 3:45pm, 21 Apr 2022Updated: 4:16pm, 21 Apr 2022

In a major move to address the mountain of challenges arising from China’s rapidly ageing population, Beijing has unveiled a private pension scheme that will let employees save funds in pension accounts and invest in financial products.

Employees can contribute up to 12,000 yuan (US$1,863) per year to their pension fund under the new scheme, the government said on Thursday in a policy document published online, compared with a fixed payment by both employees and employers under the state pension plan.

The government will adjust the maximum contribution allowed under the new plan, according to economic conditions.

The scheme will be rolled out with one-year trials in some cities before being implemented nationwide, according to the document.

To encourage participation in the private pension system, tax deductions will be available on personal pension contributions for the first time.

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