In a significant move aimed at addressing the pressing global issue of aging, a top university in Shanghai has launched an innovative tool for sustainable and inclusive pension systems, which is expected to help China and other countries deal with the challenges.

The China Pensions Index, which was created by East China Normal University, or ECNU, offers a comprehensive framework to assess and enhance pension systems, giving valuable insights to nations grappling with demographic shifts, a leading aging finance expert said.

“The index is a valuable tool to help evaluate a pension system in terms of sufficiency, inclusivity, fairness, and sustainability,” said Professor Lu Jinfei, head of the China Inclusive Aging Finance Research Center, or CIAFC, at ECNU.

The data-driven tool, which is freely accessible online, aims to provide objective references for policymakers, researchers, and industry stakeholders so they can better understand and improve China’s pension landscape and navigate the complexities of pension finance, said Lu, who was instrumental in the launch.

She said China’s aging population is a global concern, with more than 26 percent of the world’s population aged 60 and above residing in the country.

As the world’s second-most-populous nation after India, China is under international scrutiny for its approach to pensions. The introduction of the pensions index offers a good paradigm to evaluate pension systems, which can also be useful for other nations grappling with the same problems, the professor explained.

Zhu Xu, the director of the Endowment Insurance Department of the National Social Insurance Center, said he believed the launch of this index was a significant development.

“It offers valuable data, which help us understand the pension systems in a much more comprehensive way,” said Zhu, who is one of the country’s top pension policy advisors.

China has the world’s largest pension systems, encompassing more than 1 billion citizens. This includes 550 million people covered by the resident pension program and 520 million by the employee pension program.

In addition to the primary public pension pillar, China has developed supplementary enterprise and occupational annuity programs that cover more than 70 million individuals. The country’s total pensions funds have surpassed 13 trillion yuan ($1.82 trillion), according to Lu.

The recent nationwide rollout of the individual pension system in late 2024 has already attracted more than 71 million accounts, with accumulated funds exceeding 50 billion yuan ($6.95 billion).

“Given China’s population of 1.41 billion, pension arrangements are of paramount national importance,” she said.

However, challenges persist, including urban-rural disparities, uneven pension benefits, and the need for enhanced sustainability amid rapid aging, the professor said.

These issues necessitate active engagement from research institutions, experts, financial organizations, and policymakers to devise robust solutions.

At a recent forum in Shanghai to launch the index, CIAFC invited top experts, policymakers, and industry leaders to discuss how to leverage technology to broaden pension coverage, formulate new strategies to mitigate urban-rural disparities, and integrate international best practices into China’s pension framework.

The event also underscored the critical role of financial literacy and public awareness in driving successful pension reforms.

Lu said the vast scale of China’s pension market presents both opportunities and challenges.

With a rapidly aging population and increasing demand for innovative financial solutions, China is actively seeking to learn from international pension research institutions and financial organizations with mature pension management expertise.

“We welcome partnerships with international organizations, to share insights, develop best practices, and create a more inclusive future for pension systems worldwide,” she said.

CIAFC is generally regarded a leading authority on pension finance research in China. Through data-driven analysis, policy advocacy, and international collaboration, the center is dedicated to advancing inclusive and sustainable pension systems for China and the world.

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