Despite the demographic challenges associated with an ageing society, individual annuities are non-existent in China.
Some individuals in China do have access to what is referred to as an enterprise annuity. Enterprise annuities are a form of supplemental pension plan that is supported by the Chinese government. Enterprise annuities were enabled through legislation that went into effect in May of 2004.
In order to offer enterprise annuities to employees, Chinese employers are required to contribute to and maintain the mandatory basic pension plans. Enterprise annuities are analogous to defined contribution (401K) plans
Both employers and employees are required to contribute to enterprise annuity plans, and many see these plans as a potential growth market.
According to a recent article in the International Business Times, Allianz Global Investment CEO Joachim Faber sees enterprise annuities as a "market to watch."
Source: International Business Times
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