As a pilot area besides Shanghai and Fujian province designated under a recent joint announcement by several ministries of the country, SIP has confirmed to put a new pension insurance mode based on deferred individual income tax (IIT) payment into trial implementation over a one-year period from May 1.

The new mode will allow the insured to pay into the commercial pension insurance fund as a kind of investment with both the principal and accumulated earnings remaining IIT-free until they start to draw the pension.
According to Sun Haiyang, an executive at Chinese insurance giant CPIC, each resident in the pilot areas will have an independent account, through which they can pay for the insurance premium and possibly other investment products in the future with tax breaks.