Enterprise Annuity Definition

Enterprise Annuity

An enterprise annuity is a form of supplemental retirement savings program that is voluntary. China introduced enterprise annuities in 2004. Chinese companies can set up retirement benefit plans for individuals. While the design of each program is flexible, there are some restrictions such as maximums on employer and employee contributions. Enterprise annuity payouts can be structured as a lump-sum or a as series of payments like an annuity. The adoption of enterprise annuities in China has been affected by a lack of tax breaks, a low level of awareness and high qualification hurdles for employers or plan sponsors.

China's Annuity Market Developing Slowly

Despite the demographic challenges associated with an ageing society, individual annuities are non-existent in China. Some individuals in China do have access to what is referred to as an enterprise annuity . Enterprise annuities are a form of supplemental pension plan that is supported by the Chinese government. Enterprise annuities were enabled through legislation that went into effect in May of 2004. In order to offer enterprise annuities to employees, Chinese employers are required to...

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