China 2010

China’s retirement income system comprises a basic pension consisting of a pooled account (from employer contributions) and individual accounts (from employee contributions). Supplementary plans are also provided by some major employers.

The overall index value for the Chinese system could be increased by:

• broadening the coverage of the national pension system
• introducing taxation incentives for employee contributions to the supplementary plans
• introducing a requirement that part of the supplementary retirement benefit must be taken as an income stream
• increasing the state pension age over time
• enabling individuals to retire gradually whilst receiving a part pension
• improving the level of communication required from pension plans to members.

The Chinese index value fell from 48.0 in 2009 to 40.3 in 2010 due primarily to a recognition that the national pension system does not yet cover the whole country.