Opening Accounts

At the same time when the trustee filed the contracts, the trustor together with the trustee started to sort and check employee information. In addition thorough discussions with the account manager on topics like routine communication, data exchange and other various processes were held and finally results were formed into an operational manual as a memorandum for both of them as well as for responsible clerical personnel at the trustee¡¯s. In the meantime, the trustee forwarded the clients¡¯ employee information to the account manager liable, who then worked out detailed information on contributions and pays the corresponding contribution amount into the individual accounts and the corporate account. After the trustee¡¯s contract filing was fulfilled and the client received notice on the future account number and the amount of contributions payable, the capital sum was fully being transferred. In this stage, the preliminary work for building the occupational pension plan was completed.

Expert¡¯s comments:

During the process of building occupational annuity and as the basic capital sum has priority over other questions, there are relatively many issues for an enterprise that need to be considered and decided. With respect to the occupational annuity fund management model and the current market conditions in China, there¡¯s to say that the council trustee model has several problems in terms of legal status, acquittal, professional capability, a comparable better cost savings structure of the trustee etc. For the majority of enterprises you can draw the conclusion that this model not suitable. Just considering expense factors it can be said that the basic expenditures for an occupational annuity fund with a size of less than 800 million RMB will be higher than the incidential trustee management fee. In terms of legal and professional capabilities, we suggest that a customer should first and foremost consider adopting the corporate trustee model.

Another essential focus the client should define is reading well in and incorporating into the basic knowledge and guidelines of EA for their employees. Many enterprises often neglect this work; but when their employees have had some acquaintance with company annuity, it is helpful for the enterprise to define contribution rates, internally adopt the scheme and to reach maximum utility and efficiency with the implementation of the new compensation and welfare tool.