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What is an occupational annuity?
Occupational annuity is a general term for institutions and administrative units to provide supplementary old-age insurance for employees or public officials. Specifically, under the unified supervision and guidance of the state, according to its own actual situation, it is composed of public officials and institutions, which conforms to the nature of the work of institutions and the professional characteristics of public officials and provides retirement income protection for public officials.

Main types:

Occupational annuity can be divided into two basic modes: treatment determination and payment determination, namely DB mode and DC mode. Foreign public officials implement DB mode, and enterprise supplementary insurance is enterprise annuity, which gradually changes from DB mode at the beginning to DC mode. Since 2 1 century, DC mode has surpassed DB mode.

Occupational annuities are divided into pay-as-you-go type, fund accumulation type and partial accumulation type according to financing methods. The pension insurance for public officials generally implements the pay-as-you-go type, while the pension insurance for enterprise employees mainly implements the fund accumulation type, and some countries implement the partial accumulation type. According to the organizational management methods of occupational annuities, there are trust management type represented by Britain and America, company management type managed by insurance companies according to contracts and traditional internal management type represented by Germany.

Extended data

Institutional functions:

The functions of occupational annuities are basically the same as those of enterprise annuities, mainly including:

First, supplementary pension.

Occupational annuity is essentially a deferred payment of employees' wages. The purpose of this deferred payment is to prepare for future retirement and avoid the decline of living standards due to the lack of basic old-age insurance. In this sense, occupational annuity is a supplementary endowment insurance. It can also be inferred from this basic function that occupational pension has the function of relieving the financial pressure of the country. Therefore, occupational annuity is a supplement to the basic old-age insurance, which plays an important role in reducing the replacement rate of the basic old-age insurance and alleviating financial pressure.

Second, welfare incentives.

The essence of occupational annuity is to transfer part of employees' current salary to retirement. For institutions, if it is used as a means or tool of human resource management, on the one hand, it can give employees incentives in terms of salary and benefits, improve their work efficiency and enthusiasm, stabilize the unit labor force, on the other hand, it can also be used to attract and retain some excellent management and technical talents and improve the overall strength of the unit.

Third, reasonable tax avoidance.

Judging from the development history of enterprise annuity, all countries in the world give enterprise annuity certain tax incentives. Although China's current tax legal system has certain tax incentives for enterprise annuities, there is no clear provision for tax incentives for occupational annuities. However, from the perspective of policy orientation, it is an inevitable trend for the government to give tax incentives to the unit contributions, individual contributions and investment income of occupational annuity funds in the future.

Fourth, resource allocation.

Occupational annuity assets generally enter the financial capital market in the form of funds. The transfer of economic resources across time, space and industry can be realized by providing collective funds for scattered individuals. By providing this transfer, individuals can optimize the allocation of resources in their life cycle, and at the same time, resources can be optimally allocated to get the most effective use. Enterprise annuity fund is the main source of long-term capital in many countries. Fund investment is relatively free, which can generate higher returns and optimize the allocation of funds. The fund formed by the occupational annuity plan also has this function.

Baidu encyclopedia-occupational annuity system

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