China rolls out private pension program

Elderly residents take part in an art class at the day-care center in a citizen service station in Jiaxing sub-district, Shanghai's Hongkou district, on Aug 30, 2020. [Photo by Zhu Xingxin/chinadaily.com.cn]

BEIJING -- China on Thursday rolled out a private pension program to complement the nation's current pension system in its latest effort to tackle the strains of an aging population.

The program allows Chinese citizens to contribute up to 12,000 yuan (about $1,872) annually to individual pension accounts that would be subject to closed-end management, according to guidelines released by the State Council.

The cap would be adjusted according to social and economic development as well as how the country's pension system evolves.

The funds in the accounts can be used to purchase financial products that are of relatively lower risk and a longer-term investment horizon, according to the guidelines.

The government will offer tax incentives to encourage participation in the new system, the guidelines said.