Private funded social insurance schemes
15. Schemes financed by autonomous funds are treated differently from schemes
financed by non-autonomous funds. For autonomous funds, a service charge is
calculated as
total actual contributions earned
plus total contribution supplements
(A)
less benefits due
less increases (plus decreases) in pension fund reserves.
16. All four items are recorded exclusive of holding gains or losses. Total
contribution supplements are identical to property income attributed to policy
holders, which is income earned by private social insurance funds by investing their
technical and pension reserves. The ESA regards these reserves as owned by the
policy holders, who therefore receive the income generated by these reserves.
The service charge is recorded as output (P.1) for the autonomous funds and as
final consumption expenditure (P.3) for the household sector.
For non-autonomous funds no service charge is calculated. The costs of
managing these funds are included with the other elements of costs in the employers' production account.
17. The remaining transactions apply to both autonomous and non-autonomous funds.
Employers' actual contributions (D.121) are shown as part of compensation of employees,
payable by the employer's sector in the generation of income account and receivable by employee
households in the allocation of primary income account. The employer's sector may be any institutional sector, including general government and
households (as employers). Property income attributed to policy holders (part of
D.4) is shown in the allocation of primary income account as payable by the fund's sector and receivable by the household sector. Resident autonomous funds are
located in the insurance enterprises and pension funds sub-sector (S.125).
Non-autonomous funds obviously belong to the same sector as the employer in
question. NACE rev. 1 classifies the activity of pension funds in class 66.02 'Pension funding'.
18. Employers' actual contributions are recorded again in the secondary distribution of
income account as part of D.6111, payable by households and receivable by the fund's sector. Employees' contributions (D.6112) and contributions by self-employed and non-employed
persons (D.6113) are also recorded in the secondary distribution of income
account as payable by the household sector and receivable by the fund's sector. The contributions made by employees and by self-employed and
non-employed persons equal the direct payments made plus property income attributed to
policy holders less service charge (this last being zero for non-autonomous
funds). Private funded social benefits, including pensions, are shown in the
secondary distribution of income account as payable by funds and receivable by
households. By definition, all private funded social benefits are part of D.62,
social benefits other than social transfers in kind.
19. The entry in the financial account contains two elements:
In the use of disposable income account, an adjustment for change in net
equity of households in pension funds reserves (D.8) is recorded as receivable by households and payable by funds. This entry
equals the second element of the entry in the financial account.
Employers and general government occasionally make extraordinary payments to
private social insurance funds in order to increase the reserves of these funds.
Such payments are recorded in the capital account as other capital transfers
(D.99), payable by the employer's sector or the government sector and receivable by the fund's sector. As social insurance funds' reserves are treated as if owned by the household sector, an accompanying
adjustment between the fund's sector and the household sector is required. This adjustment is recorded as
other capital transfers (D.99), payable by the fund's sector and receivable by the household sector.
21. If a resident employee works for a non-resident employer, the employer's actual contributions (D.121) are recorded as part of compensation of
employees, payable by the rest of the world and receivable by households. When the
employer is non-resident, any non-autonomous social insurance fund will also be
non-resident, while an autonomous fund may be resident or non-resident. If the
employee is covered by a non-resident fund, all flows between the household
sector and the fund's sector are shown as transactions between the household sector and the rest
of the world. The service charge (in the case of autonomous, non-resident funds)
is shown as imports of services (P.72). The change in net equity of insurance
technical reserves (F.6) is shown in the financial account of the rest of the
world, while the remaining flows are shown in the external account of primary
incomes and current transfers.
22. If a non-resident employee works for a resident employer, the employer's actual contributions (D.121) are part of compensation of employees, payable
by the employer's sector and receivable by the rest of the world. If the non-resident employee
is covered by a resident social insurance fund, any service charge is recorded
as exports of services (P.62). All other flows between fund and employee are
shown as between the fund's sector and the rest of the world.
Especially when non-resident units are involved, all the requisite data are
not always available. The calculations of some of the items to be recorded
sometimes have to be based on assumptions.
An example of the flows recorded for private funded social insurance schemes
is shown in Table A.III.2.
20. As a consequence of the entry in the financial account, F.612 and F.62 appear
in the balance sheets of the household sector (as an asset) and the fund's sector (as a liability).
. By convention this element is shown as a change (negative if necessary) in
funds' liabilities and households' assets.