China's Enterprise Annuity Fund-raising, Investment Mode Selection Research, And Its Accounting Problems

The tradition of providing for the old has a history of thousands of years in Confucian Culture. However, as the wheel of history moves forward, the difficulty for the living of the old is still confronting the developing country. According to the UN's forecast, China will have 167 million of population above 65 in age by the year 2020, and every 4 old persons will include 1 Chinese. The increase of old population results in the rising sum of pension, and brings too many problems to be dealt with to the fundamental endowment insurance system based only on financial output.To relieve the government from financial pressure, developing corporation annuity is a basic way.With great pressure in endowment insurance and the status of primary development of corporation annuity, China is now facing many problems, theoretical and practical, to explore, establishing the model of financing and investing in the system of corporation annuity being the most urgent one. Under this background, the subject focuses on the modeling problems, as well as relevant accounting problems, and the author hopes that such research and exploration will make some theoretical contributions to the development of corporation annuity system in our country.The basic attempt of this paper is a review on the research findings in this field by scholars inside and outside China. Obviously different endowment insurance systems go in countries of different situations, and the corporation annuity systems in different countries also manifest different features fundamentally, as a second backbone of endowment insurance system. Therefore, research differs greatly in this field; however, the consequent incomparability also serves as an incentive for the author to investigate into this field in our country.A compound of empirical study and normal study is adopted, based on analysis of data collected from questionnaires, in order for more persuasion in this paper. It is statistically shown that the priority of research should be choice of financing andinvesting model .To establish and develop the corporation annuity system in China, what should be firstly sorted out are the channels and the models to collect funds. Through the analysis of collection system and special comparative analysis of advantages and disadvantages of DB and DC, and the reference of financing models of some countries, it is proposed that the corporations in transitional period should select the sort of semi-compulsive financing model which regard DC as main and DB as subsidiary; in addition, the paper also brought forward the theoretical framework of recognition, measuring and disclosure of accounting information.Annuity is the long-term deposits of employees in corporations, and after the establishment of the annuity plan, the accumulation of the funds require stable and efficient investing management in order for the hedging and value adding purpose. As far as the situation of our country is concerned, several points should be involved in the research: investing management and governance structure of the funds, accounting recognition and measure problems and relevant risk management. The paper proposed the practical choice of the investing operation model in China through analysis of typical operation models; concluded that a special set of accounting system should be set up as for accounting body, recognition,measurement, valuation and disclosure problems; and for the purpose of hedging and value adding, explored funding governance and investing risk, and gave advices on policy.