"Personal pension financial management" is not the same as "retirement financial planning"! Who can give you steady happiness?

Ask AI · How will the two types of financial products evolve and integrate in the future?

Author: Tang Yadi Cao Yingbo

Recently, a friend saw the news that “personal pension financial products are expanding again” and specifically asked the Small Finance Circle: What is personal pension financial management, and how does it differ from the pension financial management we discussed before?

Just by looking at the name, both personal pension financial management and pension financial management include the words “pension” and “financial management,” but in reality, they are not the same thing at all, and the differences are quite significant! Upholding the principle of answering questions and clarifying doubts for circle members, the Small Finance Circle will today clearly distinguish these two types of products.

Personal pension financial management refers to investors using funds from their personal pension accounts to purchase bank financial products that meet national regulatory requirements and are included in the personal pension product catalog.

Pension financial management, on the other hand, is a bank financial product issued by bank financial subsidiaries, themed around “pension,” which investors can directly purchase with idle funds through regular banking channels without opening a personal pension account, and they cannot enjoy the tax benefits related to personal pensions.

Clarifying these basic definitions reveals that although both products are called “pension” and “financial management,” they are fundamentally different in their establishment mechanisms. However, regulators are promoting more pension financial products to be included in the personal pension product scope, which means there will be more overlaps between the two in the future. To prevent investor confusion, the Small Finance Circle will analyze each from core dimensions to clearly see their differences and connections.

The key difference between the two first lies in tax incentives. Personal pension financial management is an important part of the personal pension system, with the biggest advantage being a maximum pre-tax deduction of 12,000 yuan per year. Funds deposited into the account and allocated to dedicated financial products are not subject to individual income tax that year; when future withdrawals meet certain conditions, they are taxed separately at a fixed rate of 3%, which can effectively reduce the taxpayer’s annual tax burden.

For example, if the income level applies a 20% individual income tax rate, depositing the full 12,000 yuan each year can save 2,400 yuan in taxes, and with investment returns, the long-term accumulation advantage becomes even more significant, whereas ordinary pension financial management does not have any institutional tax benefits.

Secondly, the freedom of fund allocation is entirely different. Personal pension accounts are strictly managed and funds within are long-term locked as pension-specific reserves, which can only be used within the system for product subscription, redemption, and conversion. They cannot be freely transferred to regular bank cards or used for daily expenses or cash withdrawals. Withdrawals must meet statutory hard conditions, such as reaching the statutory retirement age, completely losing the ability to work, or emigrating.

Funds used in pension financial management are much more flexible. Although most products set a five-year closed operation period, early redemption during the holding period is often restricted or may incur yield losses, but this is only a product-level time constraint. Once matured, the principal and returns are directly returned to the investor’s regular bank card, allowing free disposal.

Third, the entry thresholds and screening standards are clearly different. Personal pension financial management is managed under a regulatory whitelist with strict rules. Products must pass multiple layers of review to be included in the catalog, meeting uniform hard standards in investment strategy, risk control, fee setting, and long-term operation capability.

Pension financial management, however, has no exclusive catalog constraints and features more diverse designs. Many products set up smoothing mechanisms for returns, using dedicated reserve funds to stabilize short-term yield fluctuations and optimize long-term holding experience; some also incorporate features like periodic dividends or special redemptions for major illnesses based on social needs, making product design more flexible.

Fourth, there are differences in product terms and actual liquidity experience. Personal pension financial management products vary in terms of duration—some are short- to medium-term (1-2 years), while others are long-term allocations. However, maturity does not mean funds can be freely accessed; redemption still leaves funds in the closed personal pension account.

Pension financial management emphasizes long-term value investment, with a common five-year closed period, giving fund managers more flexibility to allocate higher-yield but less liquid assets. It’s important to note that although funds in personal pension accounts are locked until retirement, the frequency of opening the financial products within (e.g., quarterly or annual) affects asset allocation continuity, and does not mean the product itself has a full five-year closed operation. Because of this, pension financial management sometimes slightly outperforms personal pension financial management in performance benchmarks.

Wind data shows that by the end of 2025, the scale of pension financial management products has exceeded 100 billion yuan, reaching 106.3 billion yuan, with 10 asset management subsidiaries issuing 51 products. In terms of returns, the average annualized yield in 2025 was 3.94%, with 10 products exceeding 5% annualized return, outperforming ordinary financial products overall.

In comparison, personal pension financial management started later and is not as large in scale. According to the Bank Financial Asset Registration and Custody Center, by the end of 2025, the scale of personal pension financial products was close to 20 billion yuan, reaching 19.91 billion yuan; 6 asset management companies issued 37 products; with an average annualized yield of 3.19%.

Looking at regulatory policies, more pension financial products are expected to be included in the personal pension financial product list in the future, with increasing integration. In October 2025, the Financial Supervision and Administration Bureau issued the “Notice on Promoting the Sustainable and Healthy Development of Pension Financial Business,” clarifying that financial companies participating in both pension financial product pilot programs and personal pension financial management can have their newly issued pension financial products automatically included in the personal pension product list.

So, the key question is: how should investors choose? The Small Finance Circle offers some practical suggestions:

If your income level corresponds to a higher individual income tax rate, personal pension financial management is the cost-effective choice. The annual pre-tax deduction of 12,000 yuan can save real taxes each year, and combined with steady returns and compound effects, the long-term accumulation can be quite substantial.

If you seek greater investment flexibility and have already used up your personal pension account quota, you can directly allocate idle funds to pension financial management. Although it has a longer lock-in period, it offers more operational space and often slightly better performance benchmarks, with more diverse product designs.

Finally, the Small Finance Circle would like to remind everyone: pension topics inevitably involve choices and require patience. Regardless of the method chosen, the key is early planning and action—using policies and market tools to accumulate a sense of ease for your future self.