What Is a Split Annuity?

Enterprise annuity is a supplementary pension system, which refers to a supplementary pension insurance system that is voluntarily established by enterprises and their employees on the basis of participating in basic pension insurance in accordance with the law. ^[1]

company annuity

Enterprise annuity is a supplement

Conditions for employees to participate in the enterprise annuity plan.

(1) Sign a labor contract with the unit and the trial period expires;

(2) Participating in the basic endowment insurance of enterprise employees and fulfilling payment obligations in accordance with the law;

enterprise

Some people think that businesses

enterprise

As far as our country is concerned, companies

Investment scope of the fund

Lack of understanding

The concept of annuity for employees and senior executives in Chinese enterprises is generally weak, and they lack the necessary understanding of enterprise annuity. Some even know nothing about it, and others confuse annuity with annual salary.

From the perspective of the government, the nature of China's enterprise annuity development system is still unclear, its positioning is still unknown, and the policy boundary is relatively fuzzy.

From the perspective of the enterprise, corporate managers' perceptions of enterprise annuities are also biased. First, they are worried that the establishment of an enterprise annuity system will increase corporate expenditures and affect profits; second, they cannot see the economic effects and social effects of enterprise annuities. Effect, some believe that the company has paid a lot for the basic social pension and medical insurance. Establishing an enterprise annuity will further increase the burden on the enterprise, and the company is not responsible for paying this "extra" cost; some believe that instead of letting employees enjoy the company Annuity benefits may be better than issuing immediate benefits such as housing provident funds or bonuses to employees, the latter's incentive effect is more obvious. From the perspective of employees, for a long time, employees in our country have believed in "raising children and preventing old age" and "saving for the elderly", and generally lack basic understanding of institutional pensions. The payment of the annuity fee caused the monthly salary of employees to decrease, and some employees mistakenly thought it was an extra fee charged by the company. Some employees lack the long-term concept of investing in future pension insurance, so they are not enthusiastic about participating in enterprise annuities.

Low rate of return

The establishment of a trust-type enterprise annuity system in China is at an exploratory stage, and it is difficult to meet the needs of the annuity market investment in terms of personnel, institutions and products. First, the lack of enterprise annuity products in the true sense, and China's underdeveloped capital market is difficult to provide diversified investment tools and investment channels, which has severely restricted the design and provision of personalized and diversified annuity products.

Second, there is a lack of experienced fund management talents and professional institutions. The trust enterprise annuity system requires a large number of professionals in investment, services, risk management, and product design. Again, corporate annuity hosting

The enterprise annuity system, as a supplementary pension system for the social security system, plays a positive role in improving the employee pension system. However, due to historical and practical reasons, the enterprise annuity has not yet spread to most enterprise employees. This is inconsistent with the epoch declaration of "a harmonious society for everyone's participation and economic development achievements for all." When employees retire, they will be adapted for the old, happy for the old and made achievements for the old. They should have a rational understanding of the system and scientific planning, and do a good job in the following areas.

The Ministry of Finance and other three departments jointly issued a news on the 6th, starting from January 1, 2014, the implementation of the preferential policy of deferred tax on personal income tax for enterprise annuities and occupational annuities. This move aims to promote the construction of China's supplementary pension insurance system and promote the development of a multi-level pension insurance system. The new policy will reduce the personal income tax burden of annuity participants to a certain extent.

Notice on Issues Concerning Personal Income Tax for Enterprise Annuity Occupational Annuity

Finance and Taxation [2013] No. 103

Provinces, autonomous regions, municipalities directly under the Central Government, municipalities with separate plans, bureau of human resources and social security, bureau of local taxation, finance bureau of Xinjiang Production and Construction Corps, bureau of human resources and social security:

In order to promote the development of China's multi-level endowment insurance system, in accordance with the relevant provisions of the Personal Income Tax Law, the following issues regarding personal income tax for corporate annuities and occupational annuities are notified as follows:

I. Personal income tax treatment of corporate annuity and occupational annuity payments

1. Enterprises and institutions (hereinafter collectively referred to as units) shall pay enterprise annuities or occupational annuities (hereinafter collectively referred to as annuities) for all employees who serve or are employed in this unit in accordance with the methods and standards stipulated by relevant national policies.

The "Enterprise Annuity Measures" has been reviewed and approved by the 114th Ministerial Meeting of the Ministry of Human Resources and Social Security on December 20, 2016, and has been approved by the Ministry of Finance. It is hereby announced that it will be implemented as of February 1, 2018.

Chapter I General Provisions

The first is to establish a multi-level endowment insurance system, promote the development of enterprise annuities, and better protect the lives of employees after retirement. According to the Labor Law of the People's Republic of China, the Labor Contract Law of the People's Republic of China, and the Society of the People's Republic of China The Insurance Law, the Trust Law of the People's Republic of China and relevant provisions of the State Council have formulated these Measures.

Article 2 The term "enterprise annuity" as mentioned in these Measures refers to the supplementary endowment insurance system established independently by enterprises and their employees on the basis of participating in basic endowment insurance in accordance with the law. The state encourages enterprises to establish enterprise annuities. The establishment of enterprise annuities shall be implemented in accordance with these Measures.

Article 3 The expenses required for the enterprise annuity shall be paid jointly by the enterprise and the individual employees. The enterprise annuity fund is fully accumulated, and a personal account is established for each employee participating in the enterprise annuity, which is invested and operated in accordance with relevant state regulations. Enterprise annuity fund investment and operation income is incorporated into the enterprise annuity fund.

Article 4 The taxation and financial management of enterprise annuities shall be implemented in accordance with relevant state regulations.

Article 5 To establish an annuity for an enterprise and its employees, the trustee of the enterprise annuity shall be identified, and the enterprise representative shall sign a trust management contract with the trustee. The trustee may be a legal person trustee that complies with state regulations, or an enterprise annuity council established by an enterprise in accordance with relevant state regulations.

Chapter II Establishment, Change and Termination of Enterprise Annuity Plan

Article 6 To establish an enterprise annuity, an enterprise and its employees shall participate in basic endowment insurance and fulfill payment obligations in accordance with the law, and the enterprise shall have corresponding financial affordability.

Article 7 To establish an enterprise annuity, the enterprise shall determine the enterprise annuity through collective consultation and formulate an enterprise annuity plan. The enterprise annuity plan shall be submitted to the workers' congress or all employees for discussion and approval.

Article 8 The enterprise annuity plan shall include the following:

(1) Participants;

(2) Proportion and method of fund raising and distribution;

(3) Account management;

(4) vesting of rights and interests;

(5) Fund management;

(6) Methods for calculating, issuing and paying benefits;

(7) Changes and termination of the plan;

(8) Organizational management and supervision methods;

(9) Other matters agreed by both parties.

The enterprise annuity plan is applicable to employees whose enterprise trial period has expired.

Article 9 An enterprise shall submit the enterprise annuity plan to the human resources and social security administrative department of the local people's government at or above the county level.

The enterprise annuity plan of the centrally-owned enterprise is submitted to the Ministry of Human Resources and Social Security.

The enterprise annuity plan of an inter-provincial enterprise is submitted to the human resources and social security administrative department of the provincial people's government where its headquarters is located.

The enterprise annuity plan for cross-regional enterprises in the province is submitted to the human resources and social security administrative department of the people's government at or above the city level in the district where the headquarters is located.

Article 10 If the administrative department of human resources and social security does not raise an objection within 15 days after receiving the text of the enterprise annuity plan, the enterprise annuity plan shall take effect.

Article 11 An enterprise and its employees may change the enterprise annuity plan according to the situation of the enterprise and in accordance with national policies and regulations, after consultation and consensus. The changed enterprise annuity plan shall be discussed and approved by the employee congress or all employees and resubmitted to the human resources and social security administrative department.

Article 12 An enterprise annuity plan is terminated under any of the following circumstances:

(1) An enterprise's annuity plan cannot be fulfilled due to dissolution, cancellation or bankruptcy of the company according to law;

(2) The enterprise annuity plan cannot be performed due to force majeure and other reasons;

(3) Other termination conditions stipulated in the enterprise annuity plan appear.

Article 13 An enterprise shall report to the administrative department of human resources and social security and notify the trustee within 10 days after the enterprise annuity plan is changed or terminated. The enterprise shall, after the termination of the enterprise annuity plan, liquidate the enterprise annuity fund in accordance with relevant state regulations and deal with it in accordance with the relevant provisions of Chapter IV of these Measures.

Chapter III Raising of Enterprise Annuity Funds

Article 14 The enterprise annuity fund consists of the following:

(1) Enterprise payment;

(2) Individual payment by employees;

(3) Investment and operation income of the enterprise annuity fund.

Article 15 The annual payment of an enterprise shall not exceed 8% of the total wages of its employees. The total paid by the enterprise and individual employees shall not exceed 12% of the total wages of the employees of the enterprise. The specific required expenses shall be determined through consultation between the enterprise and the employee.

The individual contributions of employees shall be withheld and paid by the enterprise from the individual wages of the employees.

Article 16 After the implementation of the enterprise annuity, if the enterprise cannot continue to pay in the current period, such as operating losses, reorganization, mergers and acquisitions, etc., it may suspend the payment after consultation with the employee. After the situation that the payment cannot be continued disappears, the enterprise and the employees resume the payment, and may make supplementary payment according to the enterprise annuity plan when the payment is suspended according to the actual situation of the enterprise. The repayment period and amount shall not exceed the period and amount of the actual suspension of payment.

Chapter IV Account Management

Article 17 Enterprise payment shall be credited to the personal account of the enterprise annuity of the employee in accordance with the proportions and methods determined by the enterprise annuity plan, and personal payment of the employee shall be accounted to the personal account of the enterprise annuity of the employee.

Article 18 An enterprise shall reasonably determine the difference between the highest and average amounts of the current contributions of the unit that are included in the personal accounts of the employee enterprise annuities. The maximum and average amount of the current payment of the enterprise's contribution to the personal account of the enterprise annuity of the employee shall not exceed 5 times.

Article 19 The individual contributions and investment income in the personal accounts of employee annuities belong to the individual employees from the beginning.

In the personal accounts of employees 'enterprise annuities, the company's contributions and investment income can be agreed with the employees, which can be attributed to individual employees, or can be gradually attributed to individual employees as the number of employees' working years in the enterprise increases. Individuals have a maximum period of no more than 8 years.

Article 20 Under any of the following circumstances, the enterprise payment and investment income in the personal account of the employee enterprise annuity shall be completely vested in the individual employee:

(1) The employee has reached the legal retirement age, is completely incapacitated, or has died;

(2) One of the circumstances in which the enterprise annuity plan is terminated as specified in Article 12 of these Measures;

(3) The enterprise terminates the labor contract because of the employee's fault, or the employee terminates the labor contract because of the enterprise's violation of the law;

(4) The labor contract expires, and the labor contract is no longer renewed due to enterprise reasons;

(5) Other circumstances stipulated in the enterprise annuity plan.

Article 21 Enterprise contributions and investment income for which the enterprise annuity is temporarily not allocated to the personal account of the employee enterprise annuity, and enterprise contributions and investment income of the employee enterprise annuity that are not attributable to individual employees are included in the enterprise annuity enterprise account .

The enterprise payment and investment income in the enterprise annuity enterprise account shall be included in the employee enterprise annuity personal account in the proportion and method determined by the enterprise annuity plan.

Article 22 When the employee changes the work unit and the new employment unit has established an enterprise annuity or occupational annuity, the original account annuity of the personal annuity shall be transferred to the enterprise annuity or occupational annuity of the new employment unit.

If an employee's new employment unit has not established an enterprise annuity or occupational annuity, or during the period of the employee's further education, joining the army, or being unemployed, the original enterprise annuity personal account can be temporarily managed by the original management agency, or it can be a reserved account set up by a collective plan initiated by a corporate trustee. Temporary management; the original trustee is the enterprise annuity council, and the enterprise and the employee negotiate and select the legal person trustee to manage it.

Article 23 After the termination of the enterprise annuity plan, the employee's original enterprise annuity personal account will be temporarily managed by the reserve account set up by the collective plan initiated by the trustee of the legal person; if the original trustee is the enterprise annuity council, the enterprise and the employee shall choose the legal person through consultation Trustee management.

Chapter V Enterprise Annuity Treatment

Article 24 An enterprise annuity may be received if one of the following conditions is met:

(1) When an employee reaches the retirement age stipulated by the state or is completely incapacitated, he or she may receive the enterprise annuity on a monthly, divided, or one-time basis from his personal enterprise annuity account, or may wholly or partially fund his personal enterprise annuity account Purchase commercial endowment insurance products, receive benefits in accordance with insurance contracts and enjoy corresponding inheritance rights;

(2) The funds of the enterprise annuity personal account of settlers abroad (borders) may be paid to me in one lump according to my requirements;

(3) After the death of an employee or retiree, the balance of the personal account of the enterprise annuity may be inherited.

Article 25 If one of the above-mentioned conditions for receiving enterprise annuities is not met, no funds may be withdrawn from the enterprise annuity personal account in advance.

Chapter VI Management and Supervision

Article 26 Where an enterprise establishes an enterprise annuity council as a trustee, the enterprise annuity council shall be composed of enterprise and employee representatives, and may also employ professionals other than enterprises to participate, of which employee representatives shall be no less than one-third.

The enterprise annuity council shall not engage in any other form of business activities except to manage the enterprise annuity affairs of the enterprise.

Article 27 The trustee shall entrust an account manager, investment manager and custodian with qualifications for enterprise annuity management to be responsible for the account management, investment operation and custody of the enterprise annuity fund.

Article 28 Enterprise annuity funds shall be separated from the self-owned assets or other assets of clients, trustees, account managers, investment managers, custodians and other natural persons, legal persons or other organizations that provide services for the management of enterprise annuity funds Management, shall not be diverted for other purposes.

The management of enterprise annuity funds shall implement relevant national regulations.

Article 29 The administrative department of human resources and social security of the people's governments at or above the county level shall be responsible for the supervision and inspection of the implementation of these Measures. Anyone who violates these measures shall be warned by the administrative department of human resources and social security and ordered to make corrections.

Article 30 In the event of a dispute over the establishment or performance of an enterprise annuity plan, it shall be implemented in accordance with the relevant provisions of the state collective contract.

If a dispute arises due to the performance of the enterprise annuity fund management contract, the parties may apply for arbitration or bring a lawsuit in accordance with the law.

Chapter VII Supplementary Provisions

Article 31 Where other employers participating in the basic endowment insurance of enterprise employees and their employees establish supplementary endowment insurance, these measures shall be followed.

Article 32 These Measures shall be implemented as of February 1, 2018. The "Trial Measures for Enterprise Annuities" promulgated by the former Ministry of Labor and Social Security on January 6, 2004 was repealed at the same time.

If the enterprise annuity plan that has been in effect on the date of implementation of these measures is inconsistent with the provisions of these measures, it shall be changed within one year from the date of implementation of these measures. ^[3]