Individual Pension Scheme Officially Implemented

Recently, the Ministry of Human Resources and Social Security, the Ministry of Finance, the State Administration of Taxation, China Banking Regulatory Commission and China Securities Regulation Commission jointly issued Measures for Implementation of Individual Pension Scheme, offering specific provisions on the individual pension’s participation procedures, capital account management, institute and product management, information disclosure, regulatory management and etc. Personal pension is a kind of supplementary pension insurance scheme with the policy support from government that could be applied on a voluntary basis and under a market-based operation. Policy supports mainly means tax preference. The individual pension payer could have a tax deduction from comprehensive income or business income for their pension payment of RMB 12000 yuan at most every year. If the payment is used for investment, the income from investment is temporarily imposed the individual income tax. Upon the receipt of the pension, the pension is imposed a 3% tax rate as the individual income tax dependently, not counting in the comprehensive income.