BEIJING: China has adjusted the rules for withdrawing private pensions, a supplement to the nation’s basic pension system, in a move aimed at meeting people’s diversified needs and increasing flexibility in the program.
Five central departments — including the Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration — recently issued a notice loosening the standards for withdrawing funds.
Under the notice, individuals covered by the private pension program will be allowed to withdraw money if they, their spouses or their underage children have medical expenses in the previous 12 months — after deducting government medical insurance reimbursements — that exceed the per capita disposable income of their province in the previous year.
Individuals can also apply to withdraw their private pensions after receiving unemployment insurance for up to 12 months within two years. People who are receiving minimum subsistence allowances are also permitted to withdraw their pensions.
Previously, participants could only withdraw funds when reaching retirement age, losing their ability to work or emigrating and settling abroad.
Those conditions remain in effect.
The new rules will take effect Sept 1.
China began piloting the private pension program in several cities in November 2022 and expanded it nationwide in mid-December 2023. Participants voluntarily join the program and can deposit up to 12,000 yuan ($1,671) annually in their accounts. Tax benefits are available to contributors. –The Daily Mail-China Daily news exchange item
