- Win-win partnership between employers and employees – Retirement pension plan
- A retirement pension plan is a developed country-type retirement system.
Enhancing financial soundness
Since the external reserve of retirement pension is fully deductible, companies can reduce their corporate taxes and debt ratio and improve their financial soundness.
| Category | Internal reserve | Retirement pension plan | ||
|---|---|---|---|---|
| Defined Benefit Retirement Pension(DB) | Defined Contribution Retirement Pension(DC) | Business-type IRP | ||
| Limitation of deductible value | 5% of retirement benefit liability | 100% of reserve(Within the retirement benefit liability) | 100% of reserve | 100% of reserve |
| Investment profits | Taxation | Tax-free | Tax-free | Tax-free |
| Retirement benefits payment | Lump sum(retirement income tax) | Lump sum(retirement income tax) or Pension (pension income tax) | Lump sum(retirement income tax) or Pension (pension income tax) | Lump sum(retirement income tax) or Pension (pension income tax) |
- Tax benefits for expenses on internal reserve decreases gradually : 15% of retirement benefit liability(2013) →10% of retirement benefit liability(2014) →5% of retirement benefit liability(2015) →none
Boosting employees' morale
The plan can effectively support employees’ later life design, boost their morale, and thus stabilize employment and employee-employer relationships.
Also, the plan makes it easy to implement the salary peak system and annual salary system, makes HR management flexible and thus stabilizes management.
Stabilizing management
Companies can regularly pay retirement pension contribution, distribute the burden of paying retirement benefits, and prepare for the payment, which boost the predictability of managing fund. Furthermore, companies can enhance their corporate welfare, enhance their corporate image, and secure talented HR.
