By Dai Qi
Products of tax-deferred pension insurance are being sold in Shanghai City, Fujian Province and Suzhou Industrial Park, three pilot zones in China, as reported by the Economic Information Daily on Wednesday.
Insiders said that insurance products of this kind have a massive potential in the marketplace due to the increase in people's income as well as a continuously rising demand for pension investments.
Tax-deferred pension insurance means the expenditure on related products will be tax-free in line with certain standards and the tax will be levied when the commercial pension is drawn.
"It is seen as a complement, 'the third pillar', for the primary pension insurance system," said Zhu Fuling, an expert from the Central University of Finance and Economics.
The three pilot zones were set up on May 1 this year with a period of one year.
At the end of the same month, the government released a list of companies that are allowed to operate tax-deferred pension insurance businesses.
Twelve companies are on the list including China Life, China Pacific Insurance, Ping An Pension, and Taikang Pension among others.
Currently, 19 products from six insurance companies, namely Taipingyang Life, China Life, Ping An Pension, Xinhua Life, Taiping Pension and Taikang Pension, are allowed to be sold by the Chinese banking and insurance regulators.
With the spread of the tax-deferred pension insurance in the future across the country, it is predicted that the scale of the whole commercial pension insurance premium will exceed 1 trillion yuan in the next five years, which will become the largest source of incremental funds in the insurance market.
