What is the difference between an enterprise annuity and a social security fund?

1, the social security fund and enterprise annuity is the relationship of including and being included.

Social security fund is a collective term for the social insurance fund, the social coordination fund, the personal account fund (the fund on the personal account in the basic pension insurance system), the enterprise annuity (the enterprise supplemental security fund) and the national social security fund.

2. Enterprise annuities are a supplement to basic pension insurance.

The basic principle of the investment operation of the social security fund is to realize the value-added of the fund's assets on the premise of ensuring the safety and liquidity of the fund's assets. Enterprise annuity is an important supplement to the national basic pension insurance, and is the "second pillar" of the urban workers' pension insurance system (consisting of basic pension insurance, enterprise annuity and personal savings pension insurance) that is being improved in China.

3, about the risk, the principle of social security is to realize the preservation and appreciation of the value of pension insurance premiums, annuities have a certain risk.

The social security fund is not open to individual investors, the social security fund is the state of the enterprise and public sector employees to pay a portion of the funds in the pension insurance premiums to the management of professional organizations to achieve the preservation of value.

The level of payment of annuity insurance benefits is ultimately subject to the size of the accumulated fund and the fund's investment returns, and employees have to bear the risk of investing in the annuity fund.

The level of benefits of the treatment annuity insurance benefit depends on the salary level and years of service of the employee before retirement, and will be exposed to the threat of inflation before the price index adjustment mechanism is fully established.

4, on the role of the social security fund to protect the interests of the people, the enterprise annuity to improve the cohesion and attractiveness of enterprises.

The state stipulates that the social security fund can enter the stock market, of course, not all, there are restrictions on the proportion. The main purpose is to enable the social security fund to realize value-added, to ensure the interests of the people.

The Ministry of Finance, in conjunction with the Ministry of Labor and Social Security, formulates policies on the management and operation of the social security fund, and supervises the investment operation and custody of the fund.

The China Securities Regulatory Commission (hereinafter referred to as CSRC) and the People's Bank of China supervise the operation of the investment managers and custodians of the social security fund in accordance with their respective mandates.

Enterprise annuities are a kind of corporate welfare. In fact, enterprise annuities are fundamentally different from corporate welfare. Welfare is current consumption, enterprise annuity is future consumption, the right to consume enterprise annuity occurs after retirement; welfare reflects fairness, enterprise annuity reflects efficiency; enterprise welfare program is generally directly related to the living needs and other material conditions, and people's status, level has nothing to do with the welfare standard for things not for people, enterprise annuity is different, focus on reflecting the efficiency of the enterprise's economic performance is good or bad, the size of the individual's contribution, etc., can lead to different levels of corporate annuity. The focus is on efficiency, good economic performance of the enterprise, the size of individual contribution, etc., can lead to different levels of enterprise annuity; welfare belongs to the category of redistribution, enterprise annuity still belongs to the category of primary distribution. So the enterprise annuity is a better welfare program, it is to improve employee benefits at the same time, for enterprises to solve the problem of welfare in the provision of effective management tools, really play a role in increasing the cohesion and attractiveness of the role of the enterprise.

Enterprise annuities are regarded as a kind of delayed payment of wages to employees, and have the function of incentivizing and safeguarding enterprise employees. The social security fund, which is not open to individual investors, is a way for the state to preserve and increase its value by handing over a portion of the funds from the pension insurance premiums paid by enterprise and public sector workers to a professional organization for management.

Extended information:

Investment range of the fund

Annuity Annuity contributions can be given to a trust administrator or other fiduciary investment manager. Annuities have two main categories in the IFRS: defined contribution plans and defined benefit plans, where the treatment of defined contribution plans is basically the same as that of supplementary pension insurance. Defined benefit plans are not provided for in domestic regulations and are not available in practice in China, so they are not provided for in the standard.

Enterprise annuity into the interbank bond market historical process.

China's enterprise annuity system has developed rapidly since its establishment, and the accumulated enterprise annuity fund is nearly 100 billion yuan, and the demand for the safe and reasonable utilization of funds by the enterprise annuity fund is very urgent.

As early as 2004, ICBC enterprise annuity has entered the interbank bond market. Since then, all enterprise annuities of financial institutions have been allowed to enter the interbank bond market for investment. By the end of 2006, in the inter-bank bond market, ICBC and China Merchants Bank's corporate annuity trusteeship volume of more than 21.5 billion yuan, the same year the national inter-bank bond trusteeship volume up to 9.25 trillion yuan. But non-financial corporate annuity funds have been kept out.

On Feb. 28, 2007, hundreds of billions of enterprise annuities were allowed to invest in the interbank bond market, and the central bank and the Ministry of Labor and Social Security jointly issued the Notice on Matters Relating to the Entry of Enterprise Annuity Funds into the National Interbank Bond Market, which lays down a systematic foundation for the enterprise annuity funds to invest and trade in bonds in the interbank bond market in a safe and orderly manner.

Investment restrictions of the fund

Enterprise pension is a completely market-oriented operation, and in order to maintain the safety of the enterprise pension fund, the state has made strict restrictions on the investment scope of the fund.

According to the newly revised Measures for the Administration of the Enterprise Pension Fund, the property of the enterprise pension fund is limited to domestic investment, and the scope of investment includes bank deposits, treasury bonds, central bank bills, bond repurchase, universal insurance products, investment-linked insurance products, securities investment funds, stocks, as well as financial bonds with credit ratings above the investment grade, corporate bonds, convertible bonds (including split transactions), short-term bonds, and short-term bonds. The company also offers financial products such as financial bonds, corporate bonds, convertible bonds (including split-trading convertible bonds), short-term financing bonds and medium-term notes.

According to the regulations, the proportion of the enterprise annuity fund investing in liquidity products such as bank demand deposits, central bank bills, bond repurchase and money market funds shall not be less than 5% of the net value of the investment portfolio enterprise annuity fund property; liquidation provisions, securities clearing funds and primary market securities subscription funds are regarded as liquid assets; and the proportion of investing in bond repurchase shall not be higher than 40% of the net value of the investment portfolio enterprise annuity fund property. 40% of the net value of fund property.

The proportion of investment in fixed-income products such as bank time deposits, agreement deposits, treasury bonds, financial bonds, corporate bonds, short-term financing bills, medium-term bills, universal insurance products, and convertible bonds (including split-trading convertible bonds), bond funds, and investment-linked insurance products (with the proportion of stock investment not higher than 30%) shall not be higher than 95% of the net value of the property of the investment portfolio corporate annuity fund. 95%.

The proportion of investment in equity products such as stocks, as well as equity funds, hybrid funds, and investment-linked insurance products (with the proportion of investment in stocks higher than or equal to 30%), shall not be higher than 30% of the net value of the investment portfolio of the enterprise annuity fund.

In which, the enterprise annuity fund shall not directly invest in warrants, but warrants derived from investment in stocks, separate trading convertible bonds and other investment varieties should be sold within 10 trading days from the date of listing and trading of warrants. The SASAC will directly hold stakes in listed central enterprises.

References:

Baidu Encyclopedia-Enterprise Pension (Function, Investment)

Baidu Encyclopedia-National Social Security Fund (Investment Scope)