The U.K. Foreign and Commonwealth Office and the People's Bank of China are collaborating on a proposal for an auto-enrollment system and a plan design for occupational defined contribution plans in China.
The partners' efforts are aimed at improving the share of private-sector workers in China that are covered by occupational plans, which supplement the state retirement system. Currently, about 7% of workers are covered by workplace plans in China.
The program, known as U.K.-China Financial Services Prosperity Fund, would span until 2022.
Over time, the initiative would seek research proposals for several retirement-related areas, including the potential design of a future auto-enrollment system, the use of target-date funds and policy considerations for a future multipillar pension system, said Neil Campbell, pensions pillar lead and director at Deloitte, in a telephone interview. The partners intend to help remove the current heavy dependence on a state pension benefit.
In addition, the program would seek insights on how small and midsize enterprises in China could more easily access a workplace DC plan, decumulation options and taxation, as well as how technology can support auto enrollment, Mr. Campbell said.
The fund is searching for consultants, academics and think tanks to contribute proposals for a plan design using target-date funds that could be adapted in China.
Mr. Campbell said that 19 projects in total would be rolled out under the initiative over the next two years. Following the initiative, the research would be shared with Chinese regulators, including China's Ministry of Human Resources and Social Security, for consideration and policy drafts.
