Contributions to China’s fledgling private pension accounts have reached about RMB 20 billion ($2.9 billion) since their inception in November, with just under 70% of the funds invested, suggesting hesitation among some participants due to unfamiliarity with the system, reports Nikkei Asia. Around RMB 13.5 billion has been invested across a range of eligible financial products, with the majority of the remaining funds just sitting idle in people’s accounts, said people familiar with the matter.
Bank deposits have been by far the most popular choice attracting close to 60% of the total, according to the sources. Mutual funds took up about 30%, while pension insurance products and bank wealth management products (WMPs) had each only drawn in about 4% of the funds, they said.
Officials and experts have previously flagged concerns about a lukewarm response to the new system, which carries the hopes of significantly boosting China’s miniscule personal pension market as the state-run pension system struggles under a rapidly aging population and a dwindling workforce.