China's private pension scheme will be fully implemented from Sunday after a two-year trial run.

Five central departments including the Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration jointly released a notice on Thursday, stating that the private pension scheme will be operated nationwide from Sunday.

The system, which is considered as an important supplement to the nation's existing pension insurance system, has been under a trial run in the nation's 36 major cities such as Beijing and Shanghai from November 2022.

Under the new policy, domestic workers covered by the nation's basic pension insurance system can voluntarily open their private pension accounts and can deposit up to 12,000 yuan ($1,652) per year into the accounts. The payments can be made monthly or yearly.

People joining the private pension scheme can enjoy some preferential treatment such as tax reduction and can also use the money in the account to purchase financial products.

Under the policy, people can withdraw the money after reaching the retirement age, or permanently losing their ability to work, or migrating overseas. Those who suffer from severe diseases, receive unemployment insurance funds or subsistence allowance are allowed to apply for withdrawing the money before reaching the retirement age.

The five central departments urged authorities of all levels to tighten the supervision over the implementation of the private pension system, pushing forward a healthier and sustainable development of the system.