Comparative Study On Occupational Pension Laws Of China, The USA And The UK

As the second tier of the multi-tier pension insurance system, occupational pension is a necessary supplement to the first tier, state pension insurance. It is the goal of China's pension reform to establish a multi-tier system with the State, the employers and the employees sharing the burden of pension provision. Therefore, it is necessary for the success of pension reform that the occupational pension system should be fully and timely developed. Due to the lack of legislation on the occupational pension system, its development has been very slow and cannot meet the requirement of pension insurance reform. In order to stimulate the development of occupational pensions, it is urgent to make legislation first. There is hardly any legislation on occupational pensions and it has to be started from the very beginning so that it is helpful to learn from other countries. China should develop its legislation on occupational pensions China should strive to establish a sound legal system on occupational pensions based on the indirect experiences of other countries and the China's own experiences of occupational pension development of more than 10 years. The purpose of this article is to find legal systems suitable for China's specific circumstances by learning from other countries' legal framework and specific legal systems. The USA and the UK are two of the first countries developing occupational pensions. After more than 100 years, they have both developed a sound legal system on occupational pensions, which are valuable as reference, hence this article takes these two countries as subjects for comparison. Through comparison between and among the occupational pension legal system of China and the two countries, China's shortcomings are found and solutions are suggested. In the beginning of this article, the definition and characteristics of occupational pensions are introduced to act as a necessary preparation for the following comparative study. In the following comparison of legal systems, the author first compares the overall legal frameworks of the three countries on occupational pensions and points out that China should legislate on taxation, investment and operation of occupational pensions. After the comparison on legal frameworks, this article makes separate comparison of legal provisions on investment, pension trust and taxation and makes suggestion to China's legislation on these aspects. The central issue of developing legal system on occupational pensions in China is pension trust, based on which the rights and obligations of the parties involved in occupational pension institution can be set out and the operation of occupational pension schemes can be standardized thus to realize fund value reservation and appreciation. Trust has been unanimously applied as a mechanism to run occupational pension schemes in both the USA and the UK but it has not been applied in China because Trust Law hadn't be legislated at the time when occupational pensions was first introduced in China and there was no legal foundation for trust at that time. Nevertheless, Trust Law has been legislated and come into effect together with other supporting regulations so that now it is right time to clearly provide that occupational pensions should take the form of trust. Based on the previous provision, other legal provisions can be stipulated and thus a sound legal system on occupational pensions can be developed.