(Source: China Labor and Social Security News, April 2, 2025)
[Foreword] As my country's population continues to age, the improvement and development of the personal pension system has become an important issue to ensure the people's happy life in their later years. The 2025 "Government Work Report" proposed that "accelerate the development of the third pillar pension insurance and implement the personal pension system." This is the second consecutive year that the government work report has made arrangements for the implementation of the personal pension system. How to make the personal pension system truly become the "third pillar" of retirement wealth reserves? Focusing on the three dimensions of system promotion, participation in planning, and product innovation, this column interviewed Professor Sun Jie, member of the National Committee of the Chinese People's Political Consultative Conference and deputy dean of the w88 casino of Insurance at the w88 casino.
Break the “triple doors” and build a full life cycle pension map
——Interview with Professor Sun Jie, member of the National Committee of the Chinese People’s Political Consultative Conference and deputy dean of the w88 casino of Insurance at the w88 casino
Prepare a "Product Manual" for personal pensions
Reporter: At present, my country's personal pension system has entered the stage of full implementation. What do you think is the biggest challenge faced in the process of promoting the system? How to improve the inclusiveness and participation of personal pensions?
Sun Jie: Starting from December 15, 2024, the personal pension system will be rolled out across the country. According to the latest data, the number of people with personal pension accounts in my country has exceeded 70 million. However, taking into account the actual contribution ratio and per capita contribution amount, personal pensions currently show the characteristics of "account opening is hot and deposits are cold". This phenomenon reflects that the public still generally holds a wait-and-see attitude towards the personal pension system.
As an important pension security policy launched by the country, the personal pension system faces three bottlenecks in its promotion. First, the cognitive threshold for financial products is relatively high. Existing products involve professional fields such as bank financial management, public funds, and commercial pension insurance. However, the general public generally lacks relevant financial knowledge reserves, making product selection difficult. Secondly, there are pain points in the service process. The current "double recording" mechanism implemented by banks requires investors to record and videotape, which poses operational obstacles to the elderly and people with limited mobility. Furthermore, the product supply structure is unbalanced. There is insufficient supply of long-term pension products in the market that can meet the demand for lifelong benefits, and it is difficult to meet the differentiated needs of people of different ages and risk preferences.
In response to these practical problems, improving the inclusiveness of the system requires coordinated efforts from multiple dimensions. We can learn from the product manual model to establish a standardized information disclosure template, and use concise language to mark core elements such as product applicable groups, risk levels, and return characteristics. At the same time, we will focus on developing lifelong elderly care products that can achieve "living to old age and receiving pensions". In terms of service processes, we optimize existing operating links, develop aging-friendly operating interfaces for the elderly, adjust the applicable scenarios of the "dual-entry" process under the premise of controllable risks, and lower the technical threshold for system participation. In addition, a stepped knowledge popularization network should be built, investor education should be carried out through community lectures, online classes, etc., and a visual income demonstration system should be established to help the public understand the value of long-term investment.
Start investing for your later years with a cup of milk tea
Reporter: Facing the social reality of accelerating aging, how should ordinary people build differentiated retirement reserve strategies at different stages of life? Please give us some advice.
Sun Jie: As the aging of our country continues to deepen, how to reasonably allocate pension reserves at different age groups has become the focus of social attention.
For new professionals in their twenties and thirties, I recommend the strategy of continuous investment of small amounts of money. For example, starting from the age of 25, saving a cup of milk tea every day at 25 yuan per cup is equivalent to saving 750 yuan per month and 9,000 yuan per year. By the beginning of his 60th year, a total of 315,000 yuan had been saved over a total of 35 years. Assuming compound interest of 2.5%, the principal and interest total 500,000 yuan. Assuming compound interest of 3.0%, the total principal and interest is 550,000 yuan. For this group of young people, it is recommended to configure commercial pension insurance or annuity products with compound interest characteristics. Such products usually have guaranteed rate of return clauses and can effectively hedge longevity risks.
Groups aged 40-60 should build a dual-track security system. The first priority is to ensure participation in the first pillar pension insurance. Accumulated contributions must be made for 15 years before you can enjoy retirement benefits. It is worth noting that the 3% tax rate in the personal pension receiving stage has been significantly reduced from the 7.5% in the previous pilot stage. In the future, as the system is improved, the tax incentives are expected to be further enhanced. Therefore, it is recommended that this group of people make full use of the preferential tax policies for personal pensions. The annual deposit amount of 12,000 yuan can be deducted from comprehensive income before tax. Groups with a marginal tax rate of 10% can save about 1,200 yuan in taxes and fees every year. The allocation strategy for this age group should focus on asset portfolios. Funds can be allocated to three types of products: bank financial management, public funds and commercial pension insurance, and professional financial consultants can build an investment portfolio that takes into account both safety and profitability.
Those who are about to retire need to focus on cash flow management. It is recommended that this group of people choose pension annuity products with the function of receiving lifetime benefits. Such products can convert accumulated pensions into stable cash flow that lasts as long as their lives.
Improving mechanisms to disperse longevity risks
Reporter: How do you think financial institutions balance safety, profitability and liquidity needs in the design of personal pension products?
Sun Jie: In the context of the accelerating aging process, financial institutions face the core challenge of balancing safety, profitability and liquidity when designing personal pension products. At present, more than half of the products are short- and medium-term savings and financial management products, and lifetime benefit products that can cover long-term pension needs account for less than 20%.
On the one hand, the public expects flexible deposits and withdrawals to maintain liquidity, but premature withdrawals will weaken the pension reserve function; on the other hand, although lifetime benefit products can resist longevity risks, they put financial companies under pressure. Take the "post-60s" group as an example. Although they have the ability to allocate funds, existing products cannot meet their core demands of "living to old age and receiving income", and they lack special products suitable for the elderly. When financial companies develop such products, they need to deal with the repayment risk caused by the actual life exceeding the expected life. As life expectancy continues to increase, financial companies may face greater pressure on payment payments.
To solve this dilemma, it is necessary to build a multi-level risk dispersion mechanism. The longevity risk is transferred to the capital market through reinsurance, financial derivatives and longevity risk securitization. Longevity bonds and financial derivatives are used to achieve longevity risk diversification, transfer and sharing, which not only ensures the stable operation of insurance companies, but also enhances the motivation to develop long-term products.
Online personal pension intelligent product consultant
Reporter: During this year’s National Two Sessions, some representatives proposed adding investment consultants to personal pension services. This year’s government work report clearly focuses the “artificial intelligence +” action on the application side for the first time. At present, there are commercial banks that provide intelligent personal pension services. What do you think of these smart services?
Sun Jie: Professional consultants can effectively bridge the information gap between supply and demand and transform complex financial products into easy-to-understand planning solutions by assessing the income level, risk tolerance and retirement goals of the insured. This face-to-face service not only optimizes asset allocation, but also serves as investor education, helping the public understand professional concepts such as compound interest effects and longevity risks.
The introduction of artificial intelligence technology has brought qualitative changes to traditional investment advisory services. An intelligent system built based on large language models can integrate macroeconomic data, actuarial models and tens of millions of user profiles to provide decision support that goes beyond the knowledge base of individual consultants. For example, when a user enters the requirement of "I hope to receive 3,000 yuan per month after the age of 70 with lifetime security", the system can immediately call the market pension product database, conduct multi-dimensional deductions based on life cycle theory and tax preferential policies, and generate a comprehensive report including product portfolio, deposit plan, and income expectations. This kind of intelligent service breaks through the time and space limitations of manual services, and can dynamically adjust asset allocation strategies through continuous learning optimization algorithms.
With the continuous improvement of the system, personal pensions will gradually become an important pillar of the residents’ pension security system. By improving awareness, optimizing product supply, and strengthening service support, we will provide participants with sustainable retirement security and asset appreciation.
Attachment: Original linkhttps://mp.weixin.qq.com/s/VQR8UHUkz8l8cuUrgBUjEg
