China's Enterprise Annuity System Design

As the second pillar of the "three-pillar" pension system, enterprise pension have been carried out extensively in western developed countries, and had mature mechanism, enterprise pension together with state pension insurance takes on the main function of providing for the aged. However, due to historical and policy-related reasons, enterprise pension have been developed slowly in China, and they are being explored stages in theory and in practice. This paper, based on Chinese situation, finds out the reasons why enterprise pension developed in China so slowly. By the reference on the successful experiences in western countries, this paper gives some measures and suggestions for their development in China, whose targets are to offer certain valuable proposals for Chinese government and the designers of enterprise pension in company.This paper can be divided into five parts. Part one analyses specialties and regulation of pension from the aspect of definition. Then it introduces basic requirement and area of the implement of pension. Part two discusses some basic theory of system designing deeply from mathematics, which mainly gives several funding methods based on defined benefit plans. Then this paper clarifies the relation of these methods, in which the level funding method is more valuable than else in practice. Part three introduces the basic situation in China, presents some problems and gives certain analysis. Part three narrates the phylogeny of enterprise pension in western countries, which mainly from aspects of rudder, coverage, type of system, operation, fund management, role of government. Part five gives some suggestions and countenneasures of system designing, which includes the points of orientation of enterprise pension, mutual development of two plans, funding both from employer and employees, competition of qualified service institution, optional channel of investment, enhance of related policy construction.The author believes that in order to build the enterprise pension according to the international standard, China must abide by the half compulsory principal, build market-oriented and standard fund management system, and speed up forming a...