China will launch a commercial pension scheme along with insurance firms in 10 provinces and municipalities from Jan. 1, as Beijing develops its third pillar pension system to help its large ageing population.

The scheme will supplement the private pension plan launched last week in 36 cities, allowing individuals to open retirement accounts with banks and buy financial products.

Under the latest scheme, customers can open accounts at the insurance firms and invest in pension products offered by the companies, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement released on its website on Thursday.

The so-called third pillar system aims to boost public safety net and corporate annuities as China seeks to address shortcomings in the current pension system.

The latest scheme aims to meet the diversified demands of people to ensure old-age income security, the CBIRC said.

The regions to be covered under the scheme include Beijing, Shanghai, Guangdong and Jiangsu.

The insurance firms to be involved include pension units of People’s Insurance Company Group of China Ltd, China Life Insurance, China Pacific Insurance Group Co Ltd and Guomin Pension & Insurance Co Ltd.

The CBIRC said relevant sales, risk control and investment management mechanism will be set up in the trial to ensure prudent investment of pension money.

Read more @ChannelNewsAsia