A Study On The Payment Of Domestic Enterprise Annuity Strategy

With the aging of our social population,the basic old-age insurance is overwhelmed.It's more and more important to improve the payment level of the corporate pension.Despite the government announced a favorable policy for the basic conditions of establishing enterprise annuity to pay reduced corporation and individual income taxes,the development of enterprise annuity in our country is still very slow and remains at a relatively low level.Therefore,in this paper,we pay attention on the factors which influence the payment of enterprise annuity strategy.We creatively divide the impact of the tax incentives into "Substitution effect" and " Income effect " to emphasize the significant role of real income tax rate of the enterprise and average wage.In this article,we selected 2016 annual report data about purchase of enterprise annuity and other financial data from 538 companies listed in Shanghai and Shenzhen Stock Exchange and employed the OLS model for the empirical study.Our Findings showed that these companies' enterprise annuity payment strategy was significantly affected by effective tax rate,average wage,firm size,and human capital level,lower return.And this affect became stronger with a higher payment level for the first two key variables.In addition,the payment level of private companies' enterprise annuity or traditional ones is significantly lower than public or financial economy.Enterprises had different sensitivities towards each factor depending on their different ownership and industry structures.Therefore,the article finally suggests that the state needs to further increase the tax incentives for enterprise annuity.Finally,we suggested that more favorable tax policies should be enforced to increase the enterprise annuity payment and improve the old-age security system.The tax incentives and income tax rates should be combined with the optimization and refinement of the tax system design.