China to set up US$1.72 billion state pension company in response to rapidly ageing population
- Seventeen bank-affiliated wealth management units, insurers and state institutions will take stakes in the company
- In May, census data showed citizens aged 65 or more made up 13.5 per cent of the 2020 population of 1.4 billion, jumping from 8.87 per cent a decade ago
China plans to set up a state pension company with registered capital of 11.15 billion yuan (US$1.72 billion), a filing showed on Thursday, the latest step by the world’s most populous nation to boost funds for its citizens’ retirement.
Seventeen bank-affiliated wealth management units, insurers and state institutions will take stakes in the company, whose largest shareholders include the wealth management units of China’s big five banks, each with a stake of 8.97 per cent, the filing by the Insurance Association of China showed.
The new company will manage commercial pension funds, short-term and long-term health insurance, and entrust yuan or foreign currency-denominated assets to other asset managers for retirement purposes, the filing showed.
To remedy growing pension shortfalls, China’s Banking and Insurance Regulatory Commission (CBIRC) is considering endorsing a list of private pension funds and appointing a group of professional managers to run them under a new scheme, Reuters has reported.
The 17 firms, among them China’s largest brokerage Citic Securities, Taikang Life Insurance, and the investment arm of Beijing’s State-owned Asset Supervision and Administration Commission, said they would use their own funds to invest in the new company instead of leveraged funds.
The establishment of the new firm awaits regulatory approval from the CBIRC, the filing showed.
