China may see explosive growth of individual commercial pension insurance
Individual commercial pension insurance has the potential to see explosive growth in China as the country needs to address challenges in its pension system, according to a report by McKinsey & Company in Beijing on Tuesday.
China’s pension system is composed of three parts: first-level basic pension insurance, second-level enterprise and occupational annuity, and third-level individual commercial pension insurance.
The structure of China’s pension system is far from being balanced and sustainable. By the end of 2017, the cumulative balance of pension funds at the National Council for Social Security Fund stood at 4.4 trillion yuan ($640 billion), accounting for 70 percent of the total. Local governments are faced with challenges of more and rapid expenditure coupled with the slow income growth of the pension funds.
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