Employee benefit packages are a vital consideration for any employer that wishes to attract, develop and retain the best talent in an age of ever increasing career mobility. Diverse employee preferences and expectations all need careful management if an employer is to maintain a loyal and committed workforce.
While large multinationals can increase starting salaries and offer year-on-year pay increases and promotions, small or start-up businesses have more limited resources, an unproven track record and lack brand recognition in the hiring market. As a result they have focused on an amplified initial remit and potential for expedited growth to attract top performers, but longer-term incentives are necessary to ensure retention and they must target their funds more strategically if they are to compete.
Employees from most backgrounds now consider occupational retirement provision to be a key part of their remuneration package. Sovereign has extensive experience in designing and operating occupational pension schemes. Our clients range from large international businesses to smaller firms just starting out. Sovereign also offers individual portable pension arrangements for internationally mobile employees and senior staff.
The introduction of the Occupational Retirement Schemes Ordinance in 1993 brought Hong Kong into line with other jurisdictions that incentivise pension provision for employees – income tax relief may be available at the time of investment, accumulated interest is not taxed and withdrawal is also tax-free. Hong Kong also has a growing network of tax treaties that can assist in avoiding pension-related tax liabilities in the employee's home country. As a result the Hong Kong pensions market has grown rapidly and occupational pensions schemes have become a significant tool for employee retention.
Sovereign offers trust-based occupational pension schemes, which ensure the legal separation of the plan's assets from those of the sponsoring employer. This provides an additional layer of comfort to employees and protects the plan from any party seeking to lay claim to the assets of the business. Sovereign consultants will liaise with the sponsoring employer in drafting the trust deed and rules for the plan, including eligibility, contribution levels and investment options. The trustee of the plan will be Sovereign's registered professional trust company.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.