The “Notice on Issues Concerning Personal Income Tax on Enterprise Annuities and Occupational Annuities” (hereinafter referred to as the “Notice”) jointly issued by the Ministry of Finance, the Ministry of Human Resources and Social Security, and the State Administration of Taxation clarify that my country will implement enterprise annuities from January 1, 2014. , Occupational annuity personal income tax-deferred tax preferential policies.
As an important measure to improve the multi-level endowment insurance system, the preferential tax-deferred annuity policy not only inspires the industry but also makes all parties look forward to the annuity system, which is known as the second pillar of my country’s endowment insurance system. This move brings my country one step closer to achieving the goal of “three legs” for old-age security to walk smoothly.
With the development, there is still huge room for improvement in the preferential policies for deferred taxation of individual income tax for enterprise annuities and occupational annuities as specified in the “Notice”.
The incentives must be gradually increased
According to the “Notice”, enterprises and institutions, following the methods and standards stipulated by the relevant policies of the state, pay the annuity payment part of the annuity for all employees who work or are employed in the unit. When credited to the personal account, the individual will not pay individual income tax for the time being; The part of the personal contribution paid by an annuity, which does not exceed 4% of the tax base of the personal payment salary, is temporarily deducted from the current taxable income of the individual.
In addition, the “Notice” also clarifies the upper limit of salary income for enjoying tax incentives. The “Notice” stipulates that the tax base for the salary paid by individuals for enterprise annuity is the average monthly salary of the person in the previous year. The part of the average monthly salary that exceeds the average monthly salary of the previous year in the districted city where the employees work is not included in the individual payment. Salary tax base; occupational annuity individual contribution salary tax base is the sum of employee post salary and salary scale salary, and the sum of employee position salary and salary scale salary exceeds 300% of the average monthly salary of employees in the previous year in the districted city where the employee works The above part is not included in the tax base of individual contribution wages.
The 4% tax base is limited for both employees and enterprises. In particular, the 4% tax base still has a lot of room for improvement compared to the 10%-15% tax base commonly used in western developed countries; the 300% upper limit is set to prevent high-income groups from passing through. This way too much tax avoidance.
Take the income standard of an employee with a monthly income of 10,000 yuan and an annual income of more than 100,000 yuan as an example: the average monthly salary of the employee in the previous year in the districted city where the employee is located is 3,000 yuan as the payment base, and the calculation is based on the upper limit of 300%. 9,000 yuan, 4% of 9,000 yuan is only 360 yuan. This means that the employee can only have 360 yuan per month exempt from personal income tax.
Such incentives are relatively limited. Therefore, if the incentives can be gradually increased, it will be more conducive to the promotion of the annuity system. Of course, this will be gradually realized with the continuous improvement of the national tax collection and management system.
Status: The development of the pension system is slow
At present, my country’s old-age security system has “three pillars”: the first pillar is the social basic pension insurance, which is dominated by the government and is paid before tax; the second pillar is enterprise annuity (occupational annuity), which is for enterprises (institutions) and employees Established voluntarily; the third pillar is individual commercial endowment insurance.
In fact, as a supplement to my country’s social basic endowment insurance, the annuity system is not part of the social basic endowment insurance system, nor is it an insurance plan, its attribute is a trust plan.
The purpose of designing an enterprise annuity plan is to allow employees to receive a part of their income after retirement as one of the sources of income. As early as 2004, a forecast by Tsinghua University pointed out that by 2010, the market size of enterprise annuity will reach one trillion yuan or more, but the actual development is far behind.
According to the statistics of the Ministry of Human Resources and Social Security, as of the second quarter of 2013, 59,362 enterprises have established enterprise annuities in my country, accounting for only 0.4% of the total number of enterprises in the country; 19.573 million employees participated; 536.665 billion yuan and the actual operating amount is 516.14 billion yuan. At present, the proportion of employees participating in enterprise annuity accounts for less than 10% of all employees nationwide.
According to relevant statistics, since my country kicked off the comprehensive reform of the public pension system, among the “three pillars” of the old-age security system, the social basic old-age insurance has been the main force. As of the end of 2010, the second pillar, which is commonly used internationally, accounted for only 10.5% of my country’s total pension assets; as for the third pillar, personal commercial pension insurance accounted for almost zero.
Reason: Three reasons lead to development lag
The real reasons for the current slow development of my country’s annuity system mainly come from three aspects: tax incentives, enterprises themselves, and system design.
First, the long-term appeal for the policy of no preference for individual payment has been well resolved after the release of the Notice, at least a prelude to the policy to increase the enthusiasm of individuals to participate in the annuity plan.
Second, the reasons of the enterprises themselves are the main reasons, that is, the enterprises themselves, especially small and medium-sized enterprises, have no idea of participating in this plan. The annuity paid by the enterprise for the employee is included in the personal account, which means that the operating pressure is even greater. Some enterprises with a high degree of competition and marketization and with great operating pressure are subjectively unwilling, and objectively they may not have the ability to bear the pressure of payment, which leads to the low enthusiasm of enterprises.
Third, the design of the enterprise annuity system is too complicated. Participating in an enterprise annuity plan requires an enterprise to deal with four types of institutions, namely the trustee, asset manager, account manager, and fund custodian. This leads to enterprises implementing the enterprise annuity system and having to deal with different financial institutions. For enterprises, the system is inevitably too complicated.
Suggestion: It is very important to increase the enthusiasm of the unit to pay
Regarding the current series of problems in the implementation of the annuity system in my country, Chen Bingzheng suggested that targeted solutions should be found. The most important thing is how to increase the enthusiasm of enterprises to participate. After all, enterprises are the main body of the implementation of my country’s annuity system.
First of all, it is necessary to increase publicity efforts, strengthen the importance of enterprises to solve the retirement security of employees and urge them to actively improve and strengthen the construction of employee welfare systems. By increasing publicity, let enterprises understand the enterprise annuity system, and guide employees to actively call for joining the enterprise annuity system. At present, it is very important to let more enterprises and employees understand what is an enterprise annuity and what is an annuity system.
Second, take feasible measures to attract the majority of small and medium-sized enterprises to participate in the enterprise annuity system. In Chen Bingzheng’s view, unlike large enterprises that often have tens of thousands of employees, it is difficult for small and medium-sized enterprises to independently participate in and implement the enterprise annuity system. Therefore, through industry associations, development zone management committees, labor dispatch agencies, etc., the needs of small and medium-sized enterprises that are interested in participating in the enterprise annuity plan can be collected, the enterprise annuity system can be implemented in an organized manner, and trustees, asset managers, etc. can be selected.
In recent years, most of the enterprises that actively participate in the enterprise annuity plan are large state-owned enterprises in monopoly industries, foreign-funded enterprises, and some private enterprises with relatively good economic benefits, while small and medium-sized enterprises are rarely concerned about this. Small and medium-sized enterprises may wish to take the “Notice” as an opportunity to release tax incentives for personal contributions, and take the initiative to improve the employee welfare system. Although there is a long way to go, the ice-breaking action is particularly valuable.