On 25 November 2022, the Ministry of Human Resources and Social Security of the PRC jointly released a notice with the Ministry of Finance of the PRC and the State Administration of Taxation the PRC on its official website, which announced that the private pension scheme will be officially launched and implemented in 36 pilot cities (regions).

The list of pilot cities (regions) is as follows: Beijing, Tianjin, Shijiazhuang, Xiong'an New Area, Jincheng, Hohhot, Shenyang, Dalian, Changchun, Harbin, Shanghai, Suzhou, Hangzhou, Ningbo, Hefei, Fujian Province, Nanchang, Qingdao, Dongying, Zhengzhou, Wuhan, Changsha, Guangzhou, Shenzhen, Nanning, Haikou, Chongqing, Chengdu, Guiyang, Yuxi, Lhasa, Xi'an, Qingyang, Xining, Yinchuan, Urumqi.

Upon the issuance of the above notice, those who have participated in the basic pension insurance for urban employees or basic pension insurance for urban and rural residents in 36 pilot cities (regions) and have not started to receive pensions may voluntarily participate in private pension scheme. Participants should open two accounts, namely, personal pension account and personal pension fund account. The funds in the personal pension fund account can be used to purchase qualified financial products, such as bank wealth management products, savings deposits, commercial pension insurance, public funds, etc. Currently, the annual contributions to personal pension account are capped at RMB12,000, and the contributions up to RMB12,000 can be deducted from the annual individual comprehensive income or business income of the participants according to the actual contribution amount.

A list of the first 23 commercial banks that are allowed to offer private pension services are now available on the national social insurance public service platform (http://si.12333.gov.cn/) for public search.

Th participants should be aware of the investment risks involved and be cautious in making decisions since the private pensions are operated commercially.

Participants can withdraw the money from their personal pension accounts on a monthly basis, in batches, or all at once when they satisfy one of the following conditions:

1. reach the legal retirement age;
2. completely lose their ability to work;
3. settle abroad; or
4. meet other conditions set by the State.

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