The National Financial Regulatory Administration (NFRA) has recently issued the “Implementation Plan for the High-Quality Development of Pension Finance in the Banking and Insurance Sectors”, outlining requirements for financial institutions to deepen their involvement in China’s multi-tiered pension system and strengthen financial support for the silver economy.
The Plan systematically outlines measures for the banking and insurance industries to enhance financial services supporting China’s modernization and aging population, including active participation in the multi-tiered pension system, strengthening financing support and risk protection for the pension industry, enhancing financial services for the elderly, improving internal governance in retirement finance, strengthening supervision of pension finance businesses, and building a collaborative framework for high-quality development.
1. Strengthening Multi-Tiered Pension System
The Plan emphasizes improving services for the basic pension system, enhancing support for enterprise annuities and occupational annuities, promoting the sustainable development of personal pension schemes, and continuing the reform of commercial retirement finance.
2. Enhancing Financial Support for Pension Industry
The Plan calls for increased credit supply in the silver economy sector. Banks are encouraged to offer flexible loan terms, such as revolving credit, annually reviewed loans, and installment repayment options, to better meet the financing needs of businesses in the sector.
In addition, financial institutions are encouraged to expand equity and debt investment options, and strong, well-managed insurance companies are encouraged to invest in elderly care institutions, rehabilitation hospitals, and specialized hospitals, as well as to develop home-based, community-based, and institutional elderly care services.
3. Strengthening Risk Protection
The Plan highlights the need to build a comprehensive insurance protection system that aligns with the high-quality development of the elderly care industry. It calls for optimizing insurance products and services, expanding coverage, enhancing benefits, and offering a wider range of protection options tailored to industry needs.
4. Safeguarding Elderly Consumers’ Financial Rights
The Plan outlines measures to combat financial fraud under the guise of pension finance. It calls for strict crackdowns on illegal fundraising targeting elderly individuals, enhanced efforts to recover misappropriated funds, and stronger public awareness campaigns to prevent financial scams.
It also supports commercial banks in providing custodial services for pre-paid funds in the elderly care industry, ensuring the security of prepaid service fees, deposits, and membership fees.
The NFRA says that the Plan aims to foster greater industry consensus and encourage financial institutions to actively participate in the multi-tiered pension system, improve financial product offerings and expand commercial retirement finance services, facilitate capital flows into the retirement finance sector and enhance financial support for the silver economy and strengthen the protection of elderly consumers’ financial rights.