SHANGHAI (Reuters) -China broadened its private pension scheme on Friday, allowing qualified banks and wealth companies to start individual pension businesses, and published a list of mutual fund products eligible under a programme which some forecast will grow to $1.7 trillion by 2025.
China launched its private pension scheme in April, as the country grapples with a rapidly ageing population, and pilot programmes have already been rolled out in some cities.
On Friday, the China Banking and Insurance Regulatory Commission (CBIRC) published rules that would allow banks and wealth management companies to participate in the scheme, as long as they meet certain criteria.
Separately, the China Securities Regulatory Commission (CSRC) listed the names of approved pension fund products, as well as distribution companies to sell them.
Under China’s private pension scheme, employees can contribute up to 12,000 yuan ($1,860) per year to their individual retirement accounts, which can enjoy tax benefits.
Products eligible under the scheme include banking wealth management products, deposits, insurance and public funds, meaning various types of financial institutions will be competing fiercely for the business.
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In 20 years, 28% of China’s population will be more than 60 years old, up from 10% today, making it one of the most rapidly-ageing populations in the world, according to the World Health Organization.
Independent consultancies estimate China’s private pension market will grow to at least $1.7 trillion by 2025, from $300 billion currently.
(Reporting by Shanghai newsroomEditing by Raissa Kasolowsky)