Research On The Operation Mechanism Of Individual Pension

The personal pension system was officially introduced on 21 April 2022 and launched on 25 November 2022,with an annual contribution limit of RMB 12,000 per person.As an important part of relieving the pressure on basic pensions,the construction of the personal pension system has been one of the important tasks to improve the third pillar of pension security since 1991.To date,China has basically established the "three pillars" of pension insurance,but due to the different inclinations of development efforts,the development of the "three pillars" system is very uneven,and the personal pension system,as one of the "three pillars The personal pension system,as one of the "three pillars",has been trying to develop over the years,but there are still many problems that need to be solved.The establishment of a personal pension system will certainly give a boost to the national social security system as China’s population is ageing and the number of births is decreasing year by year.This is not only because there are few types of products or the coverage is not comprehensive,but also because the residents are not clear about the personal pension system.This is not only because there are few types of products or the coverage is not comprehensive,but also because the residents’ perception of the personal pension system is unclear and ambiguous,and the tax benefits and low returns of personal pensions do not motivate the residents to participate.Under the personal pension system,each resident who contributes,not only cannot withdraw funds from his or her account in advance,but also needs to use the money paid each year to make certain investments in order to achieve the goal of appreciation.Although,the CBRC and other institutions have repeatedly issued documents to encourage financial institutions to develop pension products and improve the protection of the personal pension system as one of the important tasks,most of the pension products available on the market that can be invested in are still focused on commercial pension insurance,which not only has a small variety,but also has certain commercial pitfalls and risks,which cannot motivate residents who have paid personal pensions to invest and participate,and at the same time,most of the residents have no idea about At the same time,most residents have little understanding of the value of their personal pensions or are afraid to invest in them due to various factors,which inevitably turns their personal pensions into something like bank deposits,unable to preserve and increase their value and thus unable to play the role of a "third pillar".This is to prevent residents from losing their income protection after retirement if they have not made sufficient social security contributions but have reached retirement age,but life is not unchanging and there are always various accidents.If a contributor dies unexpectedly,the personal pension account can be inherited and withdrawn in advance,but if the account is invested,can the earnings be calculated for inheritance or direct settlement? If the heir requests to continue the earnings,can the personal account be retained or can the investments be transferred to the heir’s account.The investment of personal pension accounts is a process that takes time to accumulate,which means that it is a process that requires supervision and information exchange.Residents can find the appropriate investment information from a more open information exchange platform,and the investment of their accounts can be supervised and the returns can be seen,which can better motivate residents to participate in their personal pension contributions.The promotion of China’s personal pension system is inseparable from the support of the operating mechanism.In order to alleviate the pension crisis brought about by the progress of the ageing population,to promote the development of the personal pension system and to play its role as the third pillar,it is also more important for China to refer to the successful experiences of foreign countries,such as the IRA personal retirement account in the United States,the ISA personal savings account in the United Kingdom,the RRSP personal pension savings plan in Canada,the Japanese Although China’s personal pension system is just in its infancy,these successful overseas examples can still be learnt from.The development of a third pillar personal pension system needs to be tailored to China’s specific national conditions,macroeconomic policies,employment protection mechanisms,national policies on income distribution and capital market construction.