by FENG Lijun

China has expanded its pension wealth management pilot nationwide, a major step toward building a private pension system that could unlock up to 30 trillion yuan (about US$4.2 trillion) in long-term savings. The move is part of Beijing's plan to develop a three-pillar pension structure in which voluntary personal retirement savings complement state and employer-funded pensions.

The National Financial Regulatory Administration (NFRA)—China's top banking and insurance watchdog—said in its latest policy document, "Notice on Promoting the Sustainable and Healthy Development of Pension Wealth Management Business," that the pilot program launched in 2021 will be expanded nationwide for three years.

The broader rollout allows qualified bank wealth management subsidiaries—retail investment units of major lenders—to offer pension-focused products across China. The program was previously limited to 11 firms in 10 cities, including BlackRock CCB Wealth Management, a joint venture between BlackRock and China Construction Bank and the only participant with foreign ownership.

Each firm can now raise up to five times its adjusted net capital, up from roughly three times under earlier pilot stages, and new pension wealth products will automatically qualify under the personal pension scheme introduced nationwide last year. Regulators said the goal is to better coordinate the two systems and expand access to long-term retirement investment options.

China's population is aging rapidly, with 220 million people aged 65 and above, accounting for 15.6% of the total by the end of 2024. The Central Financial Work Conference in 2023 listed "pension finance" as one of the sector's top five priorities, as policymakers seek to channel vast household savings into long-term investments.

ZHANG Pengjun, general manager of BlackRock CCB Wealth Management, said China is drawing lessons from the U.S. and Australia, where regulatory support has driven pension investment. "We hope the next steps will be bigger and faster," he said, adding that deeper reform could help boost both investment and consumption and revitalize the broader economy.

The pilot has grown steadily since its launch, with assets exceeding 100 billion yuan (about US$14 billion) by the end of 2024, official data show. Zhang estimated that if even 20% of China's 150 trillion yuan in household savings were redirected into pension products, the resulting market could reach 30 trillion yuan—roughly the size of the country’s entire bank wealth management industry, now about 32 trillion yuan.

The NFRA encouraged firms to issue longer-dated pension products, rewarding those with more offerings of 10 years or longer. Most of the 51 existing pension products are closed-end, five-year funds targeting annualized returns of 3–5% with low-risk ratings—typically fixed-income instruments sold by banks to retail investors.

TU Jiayi, investment manager at BlackRock CCB Wealth Management, said most clients prioritize stability and capital preservation, so institutions continue to favor fixed-income assets to deliver steady returns.

Regulators also urged firms to invest in healthcare, elder care and age-friendly infrastructure, linking pension wealth management to the broader "silver economy," or industries serving China's rapidly aging population.

WANG Xiangnan, a researcher at the Chinese Academy of Social Sciences, said China's financial system should not only help individuals save for retirement but also finance services for an aging society.

The nationwide expansion underscores Beijing's push to mobilize long-term capital to stabilize markets, support the elderly and sustain growth. The move could pave the way for greater foreign participation in China's growing retirement finance market.