China plans to set up a national pension company in Beijing with registered capital of 11.15 billion yuan ($1.72 billion) as the country’s population rapidly ages.

Seventeen financial institutions will take stakes in the company, including the wealth management units of China’s big five banks, each with 1 billion yuan, or 8.97%, the Insurance Association of China said Thursday in a statement on its website. China’s largest brokerage, Citic Securities; Taikang Life Insurance; and the investment arm of Beijing’s State-owned Asset Supervision and Administration Commission will also take part, it said.

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China faces a looming pension crisis amid the accelerated aging of the population, a shrinking working-age cohort and a rapidly declining fertility rate, the country’s once-a-decade census revealed in May. In response, the government will expand coverage of the basic state pension insurance system managed by provincial governments, encourage the growth of the occupational and private pension sectors, and delay the legal retirement age, according to the 14th Five-Year Plan, released in July.

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A Citic Securities filing gave analysts some clues about the government’s new plan in July as two companies connected to the brokerage signed an agreement with 15 other entities to establish an insurance joint venture that will offer commercial pension plan management.

The new company, pending regulatory approval, will manage commercial pension funds, short-term and long-term health insurance, life insurance and entrusted yuan or foreign currency-denominated funds for retirement purposes, the filing showed.

Analysts said they are taking a wait-and-see stance and expect the national pension company to play a new role in the competitive pension market.

Read more @Nikkei Asia