The establishment of the new state pension company is waiting for regulatory approval from the CBIRC.

China plans to set up a state pension company with registered capital of CNY 11.15 billion (USD 1.72 billion) to boost the retirement funds available for its rapidly ageing population.

According to Reuters, 17 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 percent.

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.

In May, census data showed citizens aged 65 or more made up 13.5 percent of the 2020 population of 1.4 billion, jumping from 8.87 percent a decade earlier. China’s elderly population could reach 300 million by the end of 2025, and the gap in retirement savings is expected to reach CNY 10 trillion within a decade.

To remedy the underfunded pension system, the CBIRC (China Banking and Insurance Regulatory Commission) is considering endorsing a list of private pension funds and appointing a group of professional managers to run them under a new scheme.

The 17 firms – which include CITIC Securities, Taikang Life Insurance, and the investment arm of SASAC (State-owned Asset Supervision and Administration Commission) – said they would use their own funds to invest in the new company instead of leveraged funds.

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