Chinese ventures of foreign asset managers, including JPMorgan, Warburg Pincus and UBS, are gearing up to expand their retirement offerings after the country officially unveiled a private pension system last week.

China on Friday launched its first private pension scheme in 36 cities, allowing individuals to open retirement accounts at banks to buy pension products ranging from deposits to mutual funds.

People can now invest up to 12,000 yuan ($1,680) a year in a private pension account to supplement the existing state pension. The private pension scheme offers tax advantages for individuals saving for retirement.

Global asset managers, including BlackRock and Fidelity, have boosted their presence in China in recent years, partly lured by its nascent private pension sector that is expected to surpass $1.7 trillion by 2025 from $300 billion now.

"In the future, we will further complete our pension product offerings by launching ... funds that meet the demand of investors with various age profiles and retirement priorities," said Andrew Wang, chief executive of UBS SDIC Fund Management, a joint venture between UBS and China's State Development & Investment Corp.

UBS SDIC Fund Management currently has one mutual fund, which qualifies for the private pension scheme, among a total of 129 funds provided by 40 Chinese and Sino-foreign fund houses.

The participation of various financial products in personal pension schemes is conducive to meeting various market needs, and better financial products will win through competition, Dong Keyong, a professor from the School of Social Sciences at Tsinghua University, told the Economic Times.

Eddy Wong, chief executive of China International Fund Management (CIFM), a joint venture between JPMorgan and Shanghai International Trust Co., said China's individual pension market has "huge potential and room for development."

Warburg Pincus' China venture, Hwabao WP Fund Management, has set its eyes on retirement investors within Baowu, the fund house's majority shareholder and also China's national steel champion with more than 45,000 employees.

"Serving the staff of Baowu will be our starting point and we plan to expand coverage to employees of all firms in the steel industry," said Wu Liang, the Shanghai-based general manager of the internet finance department at Hwabao WP FM.

Chinese and global insurers and fund houses have been developing and promoting products for the local pension market. Meanwhile, local banks are also offering incentives to lure investors into opening accounts as they seek to tap into a new market.

"The first movers in China's pension market enjoy an advantage," said Howhow Zhang, Greater China wealth and asset management strategy and transactions leader at consultancy EY.

(Source: Reuters with edits)