On The Status And Development Of China's Enterprise Annuity

In order to cope with the increasingly serious aging problems, most governments adopt the World Bank's "three pillar model", which involves a social pool, individual accounts, and supplementary pensions. China established this multi-level pension system in 1991. So since then what has happened on the development of occupational pension schemes? What are the problems that remain unsolved, and how they might be addressed? Which measures should be taken by the government to motivate the health development of occupational pension schemes? These are the key issues of this paper.This paper first analyses the current problems concerning the development of occupational pension schemes in our country, and then based on international experiences, it puts forward some useful proposals and recommendations. The main contents are as follows:Introduction briefly describes the research background, purposes, methods and the literature review.Chapter one first defines the occupational pension schemes, then compares it with the basic state pensions and the commercial retirement insurance, and finally describes the abroad and domestic development of occupational pension schemes.Chapter two looks at the choice between two types of pension plans: DB and DC. It makes a detailed comparison of these two types, and demonstrates that for large enterprises DB is a good choice, yet for small businesses DC is a much better one.Chapter three addresses the administration of occupational pension schemes. It states that for large enterprises establishing pension fund union is suitable, while for small businesses administrating via insurance company is more proper. It also probes into the advantages of insurance company in acting as trustee, account manager, investment manager and custodian in the administration process of occupational pension schemes.Chapter four examines the necessity of pension fund investment and the current status in our country. It concludes that some investment principles need to be obeyed, that financial institutions should be fully competitive in the market, and that diversified investment tools should be introduced.Chapter five analyses governments' roles in the development of occupational pension schemes mainly in three aspects: legal policies, tax policies and regulation. It states that our government should enforce their strengths in enacting complete rules and establishingcomprehensive regulatory framework. It also suggests that EET tax relief mode would be an ideal choice for the development of our occupational pension schemes.The last section draws conclusion and presents some deficiencies of this paper.