China to pilot house-for-pension program  

“以房养老”政策7月起京沪穗汉四城市试点

保监会日前下发了《中国保监会关于开展老年人住房反向抵押养老保险试点的指导意见》(以下简称《意见》)。“以房养老”政策7月起将在北京、上海、广州、武汉四个试点城市正式落地。 [查看全文]

China will pilot a much-debated house-for-pension eldercare program in four cities next month as the country seeks an alternative to cope with rising pressures from an aging population, according to the China Insurance Regulatory Commission (CIRC).

On July 1, the cities of Beijing, Shanghai, Guangzhou and Wuhan will launch a scheme that allows elderly people aged above 60 to deed their houses to an insurance company or bank, which will then grant them a certain amount every month depending on the value of the houses and the person's life expectancy.

The CIRC said the pilot will last for two years.

The program, while hailed by some experts as an innovative model in elderly care, has drawn heated debate from the public, especially among people whose parents have property and fear losing their inheritance.

CIRC official Yuan Xucheng said the pilot is intended to expand funding channels and improve the quality of the elderly care system.

The move came as authorities are facing increasing pressure to look after the growing elderly population. Latest official data shows the number of people aged above 60 has reached 202.43 million.

In fact, the house-for-pension idea is not new in China. Financial institutions in several cities, including Beijing, Shanghai and Nanjing, have sporadically tested the program since 2003, but all fared badly due to bottlenecks unique to the country.

One key barrier is China's 70-year leasehold for real estate. According to China's Real Right Law, private property can be leased for only 70 years. Though related laws also stipulate that the leasehold can be automatically extended, the cost of lease extension is not specified.

Volatility in the property market also adds to financial institutions' hesitation over the program as they worry a nosedive in housing prices may undermine their interests.

The idea also challenges traditional Chinese beliefs that parents will rely on their children to take care of them and leave their properties, especially their houses, to their children for inheritance.