Measures for Enterprise Annuities in China

 2018-05-12  7


Measures for Enterprise Annuities

  • Document NumberOrder No. 36 of the Ministry of Human Resources and Social Security and the Ministry of Finance
  • Area of Law Trade Unions
  • Level of Authority Departmental Rules
  • Date issued12-18-2017
  • Effective Date02-01-2018
  • Status Effective
  • Issuing Authority Ministry of Human Resources & Social Security Ministry of Finance



Order of the Ministry of Human Resources and Social Security and the Ministry of Finance
(No. 36)
The Measures for Enterprise Annuities, as deliberated and adopted at the 114th executive meeting of the Ministry of Human Resources and Social Security on December 20, 2016 and deliberated and adopted by the Ministry of Finance, are hereby issued, and shall come into force on February 1, 2018.
Minister of the Ministry of Human Resources and Social Security: Yin Weimin
Minister of Finance: Xiao Jie
December 18, 2017
Measures for Enterprise Annuities
Chapter I General Provisions
Article 1 For the purposes of establishing a multi-level pension insurance system, promoting the development of enterprise annuities, and more effectively guaranteeing the life of employees after retirement, these Measures are developed according to the Labor Law of the People's Republic of China, the Labor Contract Law of the People's Republic of China, the Social Insurance Law of the People's Republic of China, the Trust Law of the People's Republic of China and other relevant provisions issued by the State Council.
Article 2 For the purpose of these Measures, “enterprise annuities” means the supplementary pension insurance system independently established on the basis that enterprises and their employees participate in basic pension insurance according to the law. The state shall encourage enterprises to establish enterprise annuities. The establishment of enterprise annuities shall be governed by these Measures.
Article 3 The expenses required for enterprise annuities shall be jointly paid by enterprises and their employees. The enterprise annuity funds shall be fully accumulated, a personal account shall be opened for each employee participating in the enterprise annuity, and investment shall be made in accordance with the relevant provisions issued by the state. The investment returns of enterprise annuity funds shall be included in the enterprise annuity funds.
Article 4 The relevant provisions issued by the state shall apply to the relevant taxes and financial management of enterprise annuities.
Article 5 To establish enterprise annuities, an enterprise and its employees shall determine the trustee of enterprise annuities, and the enterprise shall enter into a trusteeship management contract with the trustee on behalf of the principal. A trustee may be a legal person trustee in compliance with the provisions issued by the state or an enterprise annuity council formed by an enterprise in accordance with the relevant provisions issued by the state.
Chapter II Formation, Modification and Termination of the Enterprise Annuity Schemes
Article 6 To establish enterprise annuities, an enterprise and its employees shall participate in the basic pension insurance and fulfill the obligation of paying contribution according to the law, and the enterprise shall have the corresponding financial capability.
Article 7 An enterprise shall, through collective negotiation with employees, determine the establishment of enterprise annuities and and develop an enterprise annuity scheme. An enterprise annuity scheme shall be submitted to the employees' congress or all employees for deliberation and adoption.
Article 8 An enterprise annuity scheme shall include the following contents:
(1) the participants;
(2) the proportion and method of the raising and allocation of funds;
(3) the account management;
(4) the ownership;
(5) the fund management;
(6) the method of calculation and payment of benefits;
(7) the modification and termination of the scheme;
(8) the methods of organization, management and supervision; and
(9) other items agreed upon by both parties.
The enterprise annuity scheme shall be applicable to employees whose probation period at the enterprise has expired.
Article 9 An enterprise shall submit the enterprise annuity scheme to the administrative department of human resources and social security of the people's government at or above the county level at the place where it is located.
The enterprise annuity scheme of an enterprise subordinate to the Central Government shall be submitted to the Ministry of Human Resources and Social Security.
The enterprise annuity scheme of a trans-provincial enterprise shall be submitted to the administrative department of human resources and social security of the people's government at the provincial level in the place where its headquarters is located.
The enterprise annuity scheme of a trans-regional enterprise shall be submitted to the administrative department of human resources and social security of the people's government at the districted city level where its headquarters is located.
Article 10 Where an administrative department of human resources and social security raises no objection within 15 days of receipt of an enterprise annuity scheme, the enterprise annuity scheme shall come into force immediately.
Article 11 An enterprise and its employees may, in light of the reality of the enterprise and in accordance with the provisions and policies issued by the state, modify the enterprise annuity scheme upon consensus. A modified enterprise annuity scheme shall be deliberated and adopted by the employees' congress or all employees, and be re-submitted to the administrative department of human resources and social security.
Article 12 Under one of the following circumstances, an enterprise annuity scheme shall be terminated:
(1) An enterprise annuity scheme is unable to be fulfilled as it is dissolved, abolished or declared bankrupt in accordance with the law.
(2) An enterprise annuity scheme is unable to be fulfilled due to force majeure or any other reason.
(3) Other conditions for termination as agreed in the enterprise annuity scheme arise.
Article 13 An enterprise shall, within 10 days after the modification or termination of an enterprise annuity scheme, report to the administrative department of human resources and social security and notify the trustee. An enterprise shall, after the termination of an enterprise annuity scheme, liquidate the enterprise annuity funds according to the relevant provisions issued by the state, and handle it in accordance with the relevant provisions of Chapter IV of these Measures.
Chapter III Raising of Enterprise Annuity Funds
Article 14 The enterprise annuity fund shall be composed of the following items:
(1) contribution by the enterprise;
(2) personal contribution by employees; and
(3) investment returns of the enterprise annuity funds.
Article 15 The annual contribution by an enterprise shall not exceed 8% of the total wages of employees of the enterprise. The total contribution by the enterprise and its employees shall not exceed 12% of the total wages of employees of the enterprise. The specific expenses shall be determined by enterprises and their employees through negotiation.
The personal contribution of employees shall be withheld and paid by the enterprises from employees' personal wages.
Article 16 After the implementation of the enterprise annuity system, an enterprise that encounters operating losses, restructuring, merger and acquisition, and other circumstances under which contribution is unable to be made continuously may suspend the contribution upon consultation with its employees. After the circumstances under which contribution is unable to be made continuously disappear, the enterprise and employees shall resume contribution, and make up the contribution according to the enterprise annuity scheme at the time of suspending contribution in light of the reality of the enterprise. The years and amount for making up contribution shall not exceed the number of years and amount of the contribution actually suspended.
Chapter IV Account Management
Article 17 An enterprise's contribution shall be included in the personal account under an enterprise annuity according to the proportion and method determined according to the enterprise annuity scheme, and employees' personal contribution shall be included in their personal accounts under an enterprise annuity.
Article 18 An enterprise shall rationally determine the gap between the maximum amount transferred into the personal account of an employee under an enterprise annuity out of the enterprise's contribution for the current period and the average amount. The maximum amount transferred into the personal account of an employee under an enterprise annuity out of the enterprise's contribution for the current period shall not exceed five times the average.
Article 19 The personal contribution in employees' personal accounts under an enterprise annuity and investment returns shall belong to the employees from the beginning.
An enterprise may agree with its employee that the enterprise's contribution transferred into its employees' personal accounts under an enterprise annuity and investment returns belong to the employees from the beginning for a period not exceeding eight years, with several exceptions, or belong to the employees gradually based on the years of service at the enterprise.
Article 20 Under one of the following circumstances, enterprise's contribution transferred into its employees' personal accounts under an enterprise annuity and investment returns shall completely belong to the employees:
(1) An employee has reached the statutory retirement age, has completely lost the ability to work, or dies.
(2) It falls under one of the circumstances for terminating the enterprise annuity schemes as prescribed in Article 12 of these Measures.
(3) The enterprise terminates a labor contract not for an employee's fault, or an employee terminates the labor contract as the enterprise violates the provisions of law.
(4) The labor contract is not renewed due to the enterprise's reason upon expiry of the term of the labor contract.
(5) Other circumstances agreed in the enterprise annuity schemes.
Article 21 An enterprise's contribution to enterprise annuities that is temporarily not allocated to employees' personal account under an enterprise annuity and the investment returns thereof, and the enterprise's contribution in in employees' personal accounts under an enterprise annuity that does not belong to employees and the investment returns thereof shall be included in the enterprise account of enterprise annuities.
An enterprise's contribution in the enterprise account of enterprise annuities and investment returns thereof shall be included in employees' personal accounts under an enterprise annuity according to the proportion and method determined according to the enterprise annuity scheme.
Article 22 Where an employee changes his or her employer and the new employer has established enterprise annuities or occupational annuities, the rights and interests in the original personal account under an enterprise annuity shall be transferred into the enterprise annuities or occupational annuities of the new employer.
Where the employee's new employer has not established enterprise annuities or occupational annuities, or the employee enters a higher school, joins the army, or becomes unemployed, the original personal account under an enterprise annuity may be temporarily managed by the original management institution continuously, or be temporarily managed by the retained account opened according to the collective plan set up by the legal person trustee; and may be managed by a legal person trustee selected by the enterprise and employees upon consultation, where the original trustee is enterprise annuity council.
Article 23 After an enterprise annuity scheme is terminated, an employee's original personal account under an enterprise annuity shall be temporarily managed by the retained account opened according to the collective plan set up by the legal person trustee; and be managed by a legal person trustee selected by the enterprise and employees upon consultation, where the original trustee is enterprise annuity council.
Chapter V Benefits of Enterprise Annuities
Article 24 Where one of the following conditions is met, enterprise annuities may be withdrawn:
(1) When an employee reaches the retirement age as prescribed by the state or completely loses ability to work, he or she may withdraw enterprise annuities from his or her personal account under an enterprise annuity on a monthly basis, for several times or at one-time, use the funds in his or her personal account under an enterprise annuity to purchase commercial pension insurance products in whole or in part, receive benefits according to the insurance contract and enjoy corresponding right of inheritance.
(2) The funds in the personal account under an enterprise annuity of an employee who is to settle down abroad (overseas) may be paid in a lump sum at his or her request.
(3) After an employee or retiree dies, the balance in his or her personal account under an enterprise annuity may be inherited.
Article 25 Where one of the aforesaid conditions for withdrawing enterprise annuities is not met, no funds shall be withdrawn in advance from any personal account under an enterprise annuity.
Chapter VI Administration and Supervision
Article 26 Where an enterprise establishes an enterprise annuity council as a trustee, the enterprise annuity council shall consist of the enterprise and representatives of employees, or may invite professionals not employed by the enterprise, of which the representatives of employees shall not be less than one third.
The enterprise annuity council shall not carry out any other business activities in any form, except the management of the enterprise's enterprise annuity affairs.
Article 27 A trustee shall entrust an account manager, investment manager and custodian with the qualification for management of enterprise annuities to be responsible for the account management, investment operation and trusteeship of the enterprise annuity funds.
Article 28 The enterprise annuity funds shall be managed separately from the self-owned assets or other assets of the principal, trustee, account manager, investment manager, custodian and other natural persons, legal persons or other organizations that provide services for the management of enterprise annuity funds, and shall not be misappropriated for other purposes.
The management of enterprise annuity funds shall be governed by the relevant provisions issued by the state.
Article 29 The administrative departments of human resources and social security of the people's governments at or above the county level shall be responsible for supervising and inspecting the implementation of these Measures. Those who violate these Measures shall be given warnings and be ordered to take corrective action by the administrative department of human resources and social security.
Article 30 In the event of any dispute arising from the conclusion or fulfillment of an enterprise annuity scheme, the relevant provisions on collective contracts issued by the state shall apply.
In the event of any dispute arising from the fulfillment of a contract on the management of enterprise annuity funds, the parties may apply for arbitration or institute a lawsuit according to the law.
Chapter VII Supplementary Provisions
Article 31 These Measures shall apply, mutatis mutandis to, the establishment of supplementary pension insurance by other employers and their employees participating in the basic pension insurance for enterprise employees.
Article 32 These Measures shall come into force on February 1, 2018. The Interim Measures for Enterprise Annuities issued by the former Ministry of Labor and Social Security on January 6, 2004 shall be concurrently repealed.
Enterprise annuity schemes that have come into force before these Measures come into force and have discrepancies with the provisions of these Measures shall be modified within 1 year of the date when these Measures come into force.