China’s Big Four state-owned banks will launch a pilot programme for retirement savings products in several regions soon, the CBIRC has announced.

The banks are Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank.

The retirement savings products, under development by the CBIRC and the People’s Bank of China, are long-term investment plans with stable yields, fit for risk-averse residents, reported Xinhua News Agency citing the CBIRC.

Banks to handle pension funds of up to US$1.47bn each in trial

Each of the four state-owned lenders can handle funds of up to CNY10bn ($1.47bn) in the one-year pilot. There are four terms for these products, set five years apart from five to 20 years.

In this new commercial pension scheme announced last month, individuals are to contribute voluntarily to personal retirement accounts through which they invest in various products of their choice, including deposits, mutual funds, commercial pension insurance plans and wealth management products. The CBIRC said then that the new commercial personal pension scheme would undergo a one-year trial before its rollout nationwide.

China hopes to boost its pension system, because of the aging population and the inadequacies of the current pension system which is dominated by government-run social pension funds.

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