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A company pension scheme is a programme dedicated to providing a retirement income for the employees of a specific company. The scheme is set up and administered by the company, often using third party professionals and can be either contributory or non-contributory. A contributory pension scheme is where employees make payments direct from their salaries with matching contributions coming from the company. Non-contributory schemes receive payments on behalf of the employees from the company. Some company pension schemes also allow for additional contributions from pension holders for extra retirement income.
There are many good reasons to set up a company pension scheme in Asia. At a certain stage in the company’s development, a pension scheme may become a legal requirement in some jurisdictions and is also a sound commercial choice with genuine benefits for both the company and its employees.
A professionally implemented pension scheme can instil a sense of career rather than ‘just a job’. Showing that the company values its employees can also have a positive impact on productivity. A well-designed company pension scheme will be seen as an inviting benefit and result in the growth of the business by attracting and retaining quality personnel.
Many different providers and solutions exist for setting up a company pension scheme in Asia. It is important to define the requirements of both the business and the employees whilst also meeting any legal requirements that apply.
When choosing a pension scheme, weigh up the differences between the options and solutions available. Flexibility, portability, tax-efficiency and levels of employer involvement in the administration of the scheme are all factors that need to be addressed when designing an international group pension solution for your company and employees.
Anyone setting up a pension scheme must consider the level of funding that the company is prepared to contribute. Consideration may also need to be given to the extent that employees will be involved in the planning and ongoing management of the scheme.
The financial goals of the scheme, including the level and source of contributions from both employer and employee, needs to be planned. The ultimate goal of the pension scheme – the employees’ retirement income – should be clear. Expectations must be managed to ensure that there are no disappointments for anyone involved.
There may be investments that are not suitable for your particular line of business or it may be that the company and its employees simply have a preference for other investments such as ethical ones. These requirements need to be accounted for from the outset.
Selecting, implementing and administering a company pension scheme in Asia can be tricky, but with professional advice, the benefits can be significant.
A professional pension adviser will be able to help you make the necessary decisions. They will be able to tell you about the costs and tax breaks and help you to find a scheme suitable for your business, location and employees.
Legislation and tax regulations surrounding pension schemes can be complicated. Unless you are very familiar with the regulations, it is absolutely essential to have a professional and experienced adviser assisting with the set up and administration of any group pension solutions.
Choosing the correct corporate pension scheme, especially in the complex offshore domain, can be a daunting task. We can take up the strain of these challenges. Contact Infinity’s corporate department to find out how we can make it easier to set up your company pension scheme in Asia.
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