Enterprise Occupational Pension Scheme

Voluntary participation

• Enterprise employees (who have passed their probation period).
• Plans are determined through collective agreements; plans are submitted to the employee congress or to all employees for discussion and approval.

General finances

• Fully funded personal pension plans based on contribution and capital revenues.

Contribution rates

• Contribution payments are usually split between the employer and the employee (proportions vary).
• Employer contributions: maximum 8% of the total sum of wages paid by employers to their employees.
• The sum of the contributions of employer and employees shall not exceed 12% of the total sum of wages paid by the employer to his/her employees.

State support

• Contribution payments of the employee are deducted from the individual income tax base.
• Contribution payments of the employer which are placed in the individual accounts are deducted from the individual income tax base.
• Contribution payments of the employer which are not placed in the individual accounts (up to 5% of the total wage) are deducted from the enterprise income tax base.
• Capital revenues distributed in the individual accounts are deducted from the individual income tax base.

• Employer signs a trust contract on behalf of the client with the trustee to implement plans; pension plans either organised internally by the ‘Enterprise Occupational Pension Council’ (企业年金理事会) or implemented by external institutions.
• Enterprise Occupational Pension Council: is composed of representatives of the employer and the employees and sometimes external professionals; employee representatives shall be no less than one third of the members.
• The ‘Local Social Security Authorities’ supervise the implementation of the schemes.
• Plans shall be submitted to the ‘Social Security Authorities’; if the authorities have not raised any objection within 15 days after receiving the plans, the plans will come into effect.

• The employee is entitled to occupational pension benefits after reaching the statutory retirement age of the basic old age pension insurance scheme for employees or on grounds of work incapacity.
• The accumulated capital based on employer contributions and its capital revenues belongs to the employee after a period defined in the collective agreement (no more than 8 years) or in case of: reaching the respective statutory retirement age of the basic old age pension insurance scheme for employees, work incapacity or death; termination of occupational pension plan; employer’s termination of the labour contract not due to the employee’s fault or employee’s termination of labour contract due to the employer’s violation of law; expiration of labour contract and no renewal due to employer’s reasons; fulfilment of other conditions regulated by the enterprise occupational pension plans.

• Primarily based on the amount of contributory earnings, length of contribution period and capital revenues.
• Option for monthly annuity (until the accumulated capital is completely paid), or lump sum payments (possibility of inheritable rights on the remaining capital); option for one-time payment (of all or part of the accumulated capital in the individual account) if it is used for purchasing commercial pension insurance products; in case of death of the participant, possibility of inheritance of the accumulated amount in the individual account; possibility of lump sum payment of the accumulated capital if the employee is being relocated abroad.

Taxation on pension payments

• Pension payments are subject to income tax.
• Information on social security contributions is currently not available.