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Underdevelopment of the third pillar: Compared with developed countries, the scale of the second and third pillar pensions in China is relatively low, which needs to be promoted through policy guidance.2.4 Optimization of capital market structure

The expansion of individual pension system is an important step in the development of multi-level pension insurance system in China, aiming at meeting the challenges brought by the aging population. According to the latest policy, the personal pension system will be extended to the whole country on December 15th, 2024, and the first batch of 85 equity index funds will be included in the catalogue of personal pension investment products. The implementation background of this policy is mainly based on the following points:

Market scale growth: The inclusion of index funds is expected to attract more individual pensions to participate, thus increasing market scale and improving market liquidity.After being included in the index fund, the funds in the individual pension account will enter the market as incremental funds, which will significantly improve the market liquidity. According to official data, as of December 12th, the number of Public Offering of Fund products that can be invested in personal pension has increased to 284, and it is estimated that the scale of new funds will reach several hundred billion yuan. This scale of capital inflow will provide stable liquidity support for the market and reduce the sensitivity of the market to short-term capital fluctuations.Improvement of market stability: the entry of long-term funds into the market will help reduce short-term fluctuations in the market and improve market stability, which is of positive significance to the healthy development of the capital market.