The Employer’s Choice PowerPoint Presentation

Agenda

IntroductionWhy the Time is Now!Key Components of Plan OfferedHypothetical Employee Target (recent college grad)Analyze how the plan is competitive in terms of providing an important life event benefitDetermine if the hypothetical employee will have enough funds to retire using this planConclusion

Introduction

“They always say time changes things ,but you actually have to change them yourself.” -Andy Warhol

Why the Time is Now!

College graduates that are usually in their early 20s are at an advantage, as they have a lot of time.With a good amount of time to save, there is a good chance they will have the ability to save enough to retire comfortably.College graduates are considered the “millennial generation” this age range is comfortable with higher deductibles that requires more cost sharing but lower premiums. The average 401(k) plan double every 11 years and for college graduates entering the work force in their 20’s, their money can double about 5 times.

Key Components of Plan Offered

Two types of plans offered, Defined Benefit and a 401(k)To be eligible for the 401(k) any employee may start this at day one of employmentFor full vesting you must have worked for the company for 5 yearsTo be eligible for the Defined benefit you must be21 years of ageWorked 1000+ Hours

Hypothetical Employee Target

The hypothetical employees that this plan targets are recent college graduates. The plan is designed to be an attractive recruitment incentive for this demographic.

How is the plan competitive in terms of providing an important life event benefit

The requirement for this plan is at least 21 years of age. Which is great for our target market. There is also an incentive in this plan for employers as a year of service has to be reached to join. Since all the money is pretax earnings all of the employee’s contributions are immediately vested. It also has the option of employer match which is also tax deferred in turn can increase the amount in the 401k.In doing the employer match, this encourages millennials to join the plan. The value increases with length of service and is not based on age, and is not affected by life expectancy.Many includes life style investment choices, participants can pick the funds that best firts them and their chosen degree of risk. Upon death, the plan does not end the benefit also actuarial deductions does not apply.

Will the hypothetical employee have enough funds to retire with this plan

This plan offers a Defined Benefit as well as a 401(k) option.Starting early in the 401(k) plan can help with insuring the ability to retire when the employee is eligible.The employee will be able to retire successfully with this plan even if they do not participate in the 401(k) portion however they may have a more comfortable retirement with participation.

Conclusion

This new retirement plan has been designed with the recent college graduate in mind and as a tool for long-term retention of talented employees. The combination of defined benefits and 401k gives new employees that stay with the company on a long-term basis more than enough to retire comfortably one day.

References

Murphy, T.E.(2009). Benefits and beyond: A comprehensive and strategic approach to retirement, health care, and more.(1st ed.). Sage Publications.