China is overhauling its pensions system with steps being taken to create a national pension offering for the first time, according to various reports.
At the start of this year, China introduced what it calls 'national balancing' for the corporate employees pension fund to allow shortfalls to be compensated by surpluses nationwide.
According to a report earlier today on the South China Morning Post ,China has now taken another step toward setting up a national pension system, beginning the balancing" of its main retirement fund to help regions with older populations continue to make payouts.
This will allow provincial pension plans to be linked into a national one, to allow money from richer areas can be used to support poorer areas
China's deputy finance minister Yu Weiping said on Tuesday, that national balancing was started on January 1 for the corporate employees pension fund to "allow shortfalls to be compensated by surpluses nationwide,"
An adjustment fund for the corporate employees' pension fund was originally set up in 2018 to allow the central government to redistribute some money to address those shortfalls, and this new policy aims to take that further.
"The central adjustment fund moderately balanced the pension fund burden between provinces. It was the first step toward national balancing," Qi Tao, an official with the Ministry of Human Resources and Social Security, added on Tuesday, the SCMP said.
New pension products
This move - part of a drive to look after the country's aging population - follows on from the decision to open up its markets to a series of commercial pension products, its banking and insurance regulator has said.
The China Banking and Insurance Regulatory Commission will also allow other pension firms to participate in the pilot, it said in a statement, released on Monday.
The pilot will begin from March 1 and will be expanded nationwide in a bid to give more options for savings and pensions investment to the country's aging population.
BlackRock
Last week, BlackRock CCB Wealth Management announced that it had gained the license from China's banking regulator to pilot wealth management products for pensions in the cities of Guangzhou and Chengdu.
The joint venture is owned by BlackRock Financial Management, Inc., CCB Wealth Management Co., Ltd. (a subsidiary of China Construction Bank), and Fullerton Management Pte Ltd., according to a statement by the China Banking and Insurance Regulatory Commission.
The regulator has previously designated four banks to pilot pension wealth management, namely, the Industrial and Commercial Bank of China, China Construction Bank, China Merchants Bank, and China Everbright Bank.
The regulator said it will keep a close eye on the progress and steadily expand the scale of piloting to provide better financial products and services for pensioners in the country.
