SCIO press conference on employment, social security
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E-mail China.org.cn, March 9, 2023
Cover News:
The private pension mechanism has been officially implemented in some pilot areas. I want to ask, how is this work progressing? Thank you.
Li Zhong:
I appreciate your concern about the issue of private pensions, which is a significant concern for all. The media have given much attention to the issue. Last year, we held a press conference on private pensions in this briefing hall, introducing the upcoming private pension mechanism. It's my pleasure to take this opportunity to share more information with you all since it has been ongoing for a while.
A private pension mechanism is a supplementary endowment insurance program supported by government policies, voluntarily participated in by individuals, and operated in a market-oriented manner. It is an important institutional arrangement of a multi-tiered endowment insurance system. Our multi-tiered endowment insurance system consists of three levels, commonly called "three pillars." The first pillar is basic endowment insurance; the second is enterprise annuity and occupational annuity; the third is private pensions, including other personal commercial pension services. Both the second and third pillars have served as effective supplementary pension programs to the first.
Last year, China took the symbolic move to officially launch the private pension mechanism, which marked the multi-tiered and multi-pillared endowment insurance system taking shape. The construction of the private pension mechanism has demonstrated the following characteristics.
First, preferential policies provide support. At present, these policies have mainly manifested in three stages. At the payment stage, the payment amount will be deducted before personal income tax. Meanwhile, investment income is not taxed and is taxed at a lower tax rate of 3% when received. Moreover, the upper limit of the annual contribution is 12,000 yuan, which will be adjusted in due course.
Second, there is a variety of products to choose from. Relevant regulatory authorities have approved 137 public funds, 19 commercial pension insurances, 18 wealth management products, 465 savings deposit products, and other personal pension investment products following safety norms and the requirements of focusing on long-term preservation and appreciation. Participants can choose products based on their own investment preferences. With the system's expansion, investment products will become even more diverse.
Third, the services are more convenient. The Ministry of Human Resources and Social Security has led the creation of a private pension information service platform. Each participant on the platform has an individual account with multiple functions, including information recording, inquiry and other services. Through this, they can intuitively observe the condition of their private pension. Participants can access this information service platform directly through many channels, such as the national social insurance public service platform and electronic social security card. They can also open accounts, pay fees and purchase financial products through commercial banks.
At the end of last year, a total of 36 pilot cities and regions introduced the private pension mechanism. Thanks to the concerted efforts of all parties and the active participation of the public, 28.17 million people participated in the project within three months of its implementation.
The private pension system is a brand-new system. In the next step, we will follow the requirements made in the previous year, work with relevant departments to further promote and elaborate policies, sum up experience, improve relevant policies, and accelerate the implementation of the system in an active yet stable manner.
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