Three years after its launch, China's private pension system has made steady progress, with rising account participation, an increasingly diverse product lineup and broadly stable returns, but challenges remain in expanding public engagement, prompting experts to call for further policy refinement and improvements to the individual pension product framework.

The private pension scheme was first launched on a pilot basis in 36 cities and regions, including Beijing and Shanghai, in November 2022. It was expanded to the entire country on Dec 15, 2024. Over the past three years, the system has undergone continuous upgrades, with the number of accounts surpassing 150 million and the number of products rising to 1,275.

The private pension scheme is a supplementary pension program supported by government policies, joined on a voluntary basis by individuals, and operated in a market-oriented manner. It is based on individual accounts, with contributions fully borne by participants. The current annual contribution cap is 12,000 yuan ($1,717), and all workers covered by China's basic pension insurance system are eligible to participate.

Lou Feipeng, a researcher at the Postal Savings Bank of China, said the private pension scheme has encouraged residents to gradually shift from savings-based retirement planning to investment-based retirement planning, helping them accumulate personal pension assets and providing valuable experience for China in better preparing for population aging.

Data from the national social insurance public service platform show that as of Wednesday, a total of 1,275 private pension products had been launched, including 466 savings products, 309 fund products, 463 insurance products and 37 wealth management products, either currently on sale or no longer available for purchase.

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Since the implementation of the private pension scheme, product types have become increasingly diverse, with steady growth in scale. However, feedback from investors indicates a mismatch between product supply and market demand. Lou noted that demand for low to medium-risk products is particularly strong, yet the number of wealth management products suitable for individual pension accounts remains limited, with pronounced product homogeneity.

On Nov 21, the Ministry of Finance and the People's Bank of China jointly issued a notice clarifying that starting in June 2026, savings treasury bonds (electronic) will be included in the scope of private pension products. Analysts said this expansion of the product pool will help establish a diversified supply structure covering savings, wealth management, insurance, funds and government bonds, enhancing the system's coverage and attractiveness.

BlackRock CCB Wealth Management and China Construction Bank jointly released a white paper on China's pension finance on Oct 29. The white paper said the number of people who had opened private pension accounts exceeded 150 million as of June 15. However, among those account holders, the proportion of those who have actually made contributions and allocated funds to products remains relatively low, suggesting room to further enhance the system's appeal.

Dong Ximiao, chief researcher at Merchants Union Consumer Finance and deputy director of the Shanghai Institution for Finance & Development, urged fiscal, tax and financial authorities to roll out stronger support measures, including enhanced tax incentives and broader product access. He suggested that following the introduction of tax deferral policies for private pension products, the overall tax rate could be further lowered and investment caps on private pension accounts appropriately raised to attract more participants.

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Financial institutions, including commercial banks, insurance companies and fund managers, should also roll out more products tailored to investor needs, Dong said. In particular, banks should introduce more products from peer institutions and provide advisory services, giving investors a broader range of choices and encouraging greater willingness to invest after opening private pension accounts.