China announces private pension scheme

China officially announced the implementation of a new private pension scheme on Friday, a supplement to the nation's social security system.

The Ministry of Human Resources and Social Security said on Friday that the scheme will first be carried out in 36 cities and regions, including Beijing, Shanghai and Guangzhou, capital of Guangdong province.

Workers at Chinese companies covered by the State-level pension system can now open private pension accounts voluntarily. They can deposit up to 12,000 yuan ($1,650) per year into the accounts, and payments can be made monthly, yearly or by other structured installment plans. Pensioners can also take advantage of tax reductions and other supporting policies.

So far, 23 banks and 11 financial institutes, including the Bank of China and the Industrial and Commercial Bank of China, as well as several insurance companies and funds operators have been given permission by the central government to help individuals open and manage their private pension accounts.