Occupational annuity is often called ¡°golden handcuffs¡±, still with the gradual development of the Chinese EA system and the popularity of enterprise pension plans among employers as well as general employees, people are becoming more and more aware of the role of this incentive in attracting and retaining talents. An EA plan, even called so shall neither function now will it function as ¡°golden handcuffs¡± ¨C instead, it¡¯s an important instrument for the implementation of a company¡¯s human resources strategy. In order to reach EA¡¯s full profitableness for both sides, designing, formulating the contribution and the vesting plan is the key.
How then designing these plans so as to fully use all advantages this instrument offers? And how to evaluate effects? The answer must be that those approaches have to be systematically considered and paid attention to during all the process of defining contributions etc.

About Market Orientation and Defining a Reasonable Target

By categorising employees into different segments according to different positions (for doing so we can take a leaf out of foreign developed markets), we can define the target that the HR department should keep in view with respect to the policy of EA in the company which would be consistent with the clients¡¯ orientations and strategic objectives. Take the following chart for example, Enterprise A¡¯s existing compensation is generally lower than the average market level, and though medium- and high-grade employees¡¯ income shows a smaller gap compared to the market standard than that of ordinary employees, it is just this group of employees that has the highest sensitivity to compensation in the competitive industry.

Chart: Compensation Status Analysis of Enterprise A