It is a step-by-step implementation process to build a fair, safe, and efficient occupational annuity plan, including the determination of the operational model, formulating and filing the scheme, selecting institutions operating it, signing and filing contracts, open accounts etc. Needless to say that a scheme¡¯s formulation is a vital task, especially as an efficient annuity scheme shall not only adapt to the trustors corporate culture and core values, but also achieve a good balance of various differences between employees. The EA plan shall assure and realize the utmost incentive possible for outstanding employees on a fair basis, accomplish taking advantage of the chance to improve the compensation system and thus attract and retain the talents for the enterprise.

Below we analyze the whole process of planning and processing EA in detail through a practical case to give you some clearer ideas.

Demand Analysis

A certain joint venture in Beijing has approximately three thousand employees. Among them, 20 percent are retired employees, and the average age of in-service employees amounts to 36 years. As this industry has high returns during the duration of employment and the average substitution rate was defined with only 35 percent according to the existing retirement welfare, the employees may have a huge gap between their current living standard and that they can expect after their retirement. With respect to the compensation structure, except the basic social insurance, the current compensation system lacks in comprehending long-term incentive and real old-age security.

Faced with severe competition for talents and in order to retain valuable employees, reduce risks that could arise after retirement and in old-age and disburden employees from worries about future, this client developed the idea of a corporate annuity for its staff ¨C and started to make preparations. An annuity project group made up of representatives from the human resources, financial and other departments as well as from the labor union had been founded. Furthermore a professional trustee institution on enterprise annuity was engaged ¨C Taiping Pension (most institutions in the market that have an occupational annuity qualification may provide consulting services in this area) ¨C to provide support for the overall plan building.