Enterprise annuity refers to a supplementary pension insurance system voluntarily established by enterprises and their employees on the basis of participating in basic pension insurance in accordance with the law.

It is a component of the multi-level pension insurance system, which is guided by the national macroeconomics and implemented by internal enterprise decisions.

[Edit this paragraph] Types of enterprise annuities Generally speaking, enterprise annuity funds can be divided into defined contribution funds and defined benefit funds. Different fund types follow different accounting treatment methods.

(1) Defined Contribution Fund A defined contribution fund provides each plan participant with a personal account and determines the participant's contribution amount in accordance with an established formula and does not stipulate the amount of benefits he or she will receive; in the future

At the time he or she becomes eligible to receive a pension, the pension benefit received by an individual is determined solely by the amount of contributions made to his or her personal account, the investment income on those contributions, and the forfeiture of other participants that can be allocated to the participant's account.

Welfare.

In this way, the fund sponsor (enterprise) assumes the responsibility of paying contributions to the employees' personal accounts according to the pre-agreed agreement.

When employees leave the company, the funds in their personal accounts can be transferred to the enterprise annuity accounts of other companies, which to a certain extent reduces the cost of employees changing jobs and promotes the flow of human resources.

The accounting treatment of defined contribution funds is relatively simple.

Because the enterprise only assumes the obligation to pay contributions to the account on time, it does not assume the obligation to pay pensions to employees after their retirement, nor does it bear the risks related to the enterprise annuity fund. These risks will be borne by the custodian of the enterprise annuity fund or the fund participants themselves.

.

Therefore, the assets paid by the enterprise to the fund manager are no longer recognized as the assets of the enterprise. The pension cost that should be recognized by the enterprise in the current period is the enterprise annuity deposit payable by the enterprise in the current period. The pension liabilities recognized are in accordance with the fund regulations.

The accumulated unpaid corporate annuity deposits for the current period and previous periods.

(2) Defined Benefit Fund A defined benefit plan is an enterprise annuity in which the fund sponsor (enterprise) provides pension benefits according to a set amount; the amount of benefits is usually a function of one or more factors, such as the participant's age, service

Number of years or salary level; the benefit can be either an annuity or a lump sum payment.

Under this fund, the fund sponsor is responsible for paying pensions in full and on time. If the pension cannot be paid as originally agreed upon due, the liability for breach of contract shall also be borne by the fund sponsor. In other words, the fund sponsor shall bear the responsibility.

There are a series of risks such as the risk of not being able to pay in full, the risk of investment failure, the risk of inflation, etc.; and if a participant of the fund leaves the company early, the pension benefits earned by him in the past service are likely to be partially or even completely lost.

Since defined benefit funds require a large number of actuarial assumptions and accounting estimates, such as the future pension level of employees, the number of years to receive pensions, remaining service years, future salary levels, the discount rate for the number of employees who can receive pensions, etc.

The accounting treatment is more complex.

In addition to current service costs, the pension costs that an enterprise should recognize in the current period also involve items such as past service costs, actuarial gains and losses, and interest expenses.

The enterprise's pension obligations to employees meet the definition of a liability, and therefore should be recognized as a pension liability of the enterprise.

Pension liabilities are the discounted value of the total pensions that need to be paid in the future calculated by an enterprise using certain actuarial methods and estimating an appropriate discount rate.

[Edit this paragraph] Enterprise annuity and basic pension insurance There are differences and connections between enterprise annuity and basic pension insurance. The difference is mainly reflected in the different levels and functions of the two pension insurances, and the connection is mainly reflected in the differences between the two pension insurances.

Policies and levels are interconnected and inseparable.

Enterprise annuities implement market-oriented operations and should be managed by an operating agency certified by the Ministry of Labor and Social Security.

Enterprise annuities are jointly borne by the enterprise and its employees. The unit's contribution generally does not exceed one-twelfth of the previous year's total wages, and the combined contributions of the unit and employees generally do not exceed one-sixth of the previous year's total wages.

[Edit this paragraph] The role of enterprise annuity Some people believe that enterprise annuity is a kind of welfare for enterprises.

In fact, corporate annuities are fundamentally different from corporate benefits.

Welfare refers to current consumption, and enterprise annuity refers to future consumption. The consumption rights of enterprise annuity occur after retirement; welfare reflects fairness, and enterprise annuity reflects efficiency; enterprise welfare projects are generally directly related to material conditions such as living needs, and are related to a person's status and level

It doesn't matter. Welfare standards are different for things but not for people. Enterprise annuities are different. They focus on efficiency. The economic benefits of enterprises and the size of personal contributions can all lead to different levels of enterprise annuities. Welfare belongs to the category of redistribution, and enterprise annuities still belong to one-time distribution.

category.

Therefore, enterprise annuity is a better welfare plan. It not only improves employee welfare, but also provides an effective management tool for enterprises to solve welfare problems, and truly plays a role in increasing corporate cohesion and attractiveness.

(1) Establishing a corporate annuity system is conducive to establishing a good corporate image and attracting and retaining outstanding talents.

With the development of the socialist market economy and the arrival of the knowledge economy, more and more enterprises realize that the competition among enterprises is ultimately a competition among people.

However, with the continuous deepening of the reform of the labor and personnel system, a talent flow mechanism has gradually taken shape. Enterprises have the right to choose talents, and individuals also have the freedom to choose careers. The reasonable flow of talents has become the trend of the times.