CHINA will kick off a pilot program for long-term retirement deposits in November, part of efforts to meet rising demand for pension products from an ageing population, the government said Friday.

The announcement, jointly made by China’s central bank and the country’s banking regulator, came three months after China launched the country’s first private pension program to tackle economic challenges in an aging society.

The retirement savings program is aimed at “further enriching financial products for old-age protection, and meeting diversified needs,” the People’s Bank of China and the China Banking and Insurance Regulatory Commission (CBIRC) said.

China’s four big banks will start the year-long trial in five cities, including Hefei, Guangzhou, Chengdu, Xi’an and Qingdao, the statement said.

The pilot retirement deposit products have maturities of five, 10, 15 and 20 years, with individual deposits capped at 500,000 yuan (US$74,231.33) at each bank.

Under China’s private pension program, funds held in individual pension accounts can be invested in a range of financial products, including deposits, wealth management products and mutual funds.

In 20 years, 28% of China’s population will be more than 60 years old, up from 10% today, according to the World Health Organization.

Independent consultancies estimate China’s private pension market will grow to at least US$1.7 trillion by 2025, from US$300 billion currently.

(SD-Agencies)