SHANGHAI -- A Chinese insurance company on Thursday issued the country's first tax-deferred pension insurance policy in Shanghai, marking the beginning of the long-awaited tax-deferred pension plan.

China Pacific Life Insurance Co., Ltd. issued the insurance policy to Cai Jun, captain of the maiden flight for C919, China's first home-made large passenger plane.

In May, a pilot tax-deferred pension insurance project has been launched in Shanghai, Fujian Province and Suzhou Industrial Park in Jiangsu Province, respectively.

Under the plan, individuals are allowed to defer tax on part of their income that is used to buy commercial pension insurance until they retire and draw money from the fund.

On Wednesday, six insurance companies have been approved by China's banking and insurance regulator to sell tax-deferred pension policies.

China is facing the challenge of an aging society. By the end of 2017, the number of people aged 60 or above had reached 240 million, accounting for 17.3 percent of the country's total population.

The aged population in China was expected to peak around 2050 at 487 million. By then, there will be one senior among every three people.

Industry insiders said the launch of the new tax-income deferred pensions was designed to encourage people to prepare for old age, and would promote the balanced development of China's pension system, which is composed of basic government pension, occupational pension, and commercial insurance pension.

By reducing the personal tax burden and different marginal tax rates for different ages, people's consciousness of senior care will be raised effectively, said Gan Weimin, CEO of Ping An Pension Insurance Corp.

"The tax-deferred pension can adapt to different risk preferences and raise the substitution rates of personal pensions," said Gan.

The potential purchasing power released by the tax-deferred pensions will exceed 100 billion yuan each year in China, according to the insurance company.