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Advice for Retirement System Building
Benefits & Compensation
Advice for Retirement System Building
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Hi all colleagues,
I am a junior HR consultant, recently have been asked to develop a retirement system for a small organization of 250 employees. I’ve got the job after years of unemployment
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Forums » Topic Forums » Benefits & Compensation » Advice for Retirement System Building
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Advice for Retirement System Building
posted at 5/20/2007 12:38 AM EDT
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Posts: 5
First: 5/20/2007 Last: 4/29/2008 |
Hi all colleagues,
I am a junior HR consultant, recently have been asked to develop a retirement system for a small organization of 250 employees. I’ve got the job after years of unemployment, … so I accepted the challenge and will make good use of your help in addition to internet research to generate the system, I have good knowledge in HRM and trust my self and your advices. Please post any documents, advices or thoughts here or to my e mail xpertco@gmail.com Thanks in advance Philip |
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Advice for Retirement System Building
posted at 5/21/2007 6:08 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
You might need to clarify what you mean by "retirement system".
Are you talking about financial plans for the employees? Are you looking at defined benefit plans (good old pension plans) or defined contribution plans (401k, roth, IRA, profit sharing, etc)? There are systems out there that have been setup to administer such plans. I would not build my own from ground up (and yes, I have done that in my past). I strongly suggest finding a third party administrator/401k recordkeeping company and NOT doing this in-house if you don't have enough experience/education to see the pitfalls of doing it yourself. It is not expensive and worth the $s to decrease your liability for recordkeeping errors. There are a lot of places that mistakes can be made. Are you looking at succession planning? Are you looking at how to transition older ees out of the workforce? Are you looking at retiree medical coverage? What is the end goal? How much does the employer want to "own" and how much should the potential retiree "own" in the process? just some thoughts from someone who has worked mostly in retirement plans for a large consulting firm and now in a small family-owned operation. I have seen a lot of the spectrum. rr |
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Advice for Retirement System Building
posted at 5/21/2007 8:59 PM EDT
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Posts: 5
First: 5/20/2007 Last: 4/29/2008 |
Hi M.Felix.C and R Rupert Thanks for your kind replay, Indeed it is a voluntary system came out to approval after employees pressure. Rupert, thats marvelous and encouraging to receive advices from an expert in the filed; My end goal is -likely to be- 401k, but what you must know that our employer is determent to recruit our in-house plan as a motivator for attracting qualified stuf. All that needed is a plan for saving an amount of $s for after 60 years old retirement. I think it is the Hybrid Plans which is needed in our case, a defined benefit plan made by the employer, with the help of consulting actuaries. Succession planning and how to transition older employees out of the workforce is not our concern here. Thanks and best regards PhPolter |
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Advice for Retirement System Building
posted at 5/22/2007 6:03 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
The employer can also do a hybrid within the 401k plan. For example, the employer can match employee funds and then also add a specific percent each year for every employee regardless of whether they contribute or not. The employer can also use vesting schedules so that short-term employees don't leave with those contributions (most is 5-7 years).
You would not need an actuary for this type of plan setup, but I would go to a good benefits consulting firm. Because depending on how it is setup, you may need to pass some nondiscrimination tests (how much highly compensated employees defer compared to non-highly) and that access to benefits are not discriminatory. Any consulting firm should help you model different scenarios for different ages. I know that my husband's 401k is with John Hancock and they have that ability on their ee 401k website. We use American Funds and they also have a calculator on their 401k employee website. Any good consulting firm will have such software and analysis. rr |
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Advice for Retirement System Building
posted at 5/22/2007 6:06 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
ETA: defined benefit/pension plans are much harder to administer than 401k/defined contribution plans. For the size of your firm, a 401k plan will probably be much more feasible and more understandable for employees as they can see their balances grow. Many companies are still moving away from traditional pension plans and into cash balance and 401k plans (with matches and guaranteed %s)
rr |
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Advice for Retirement System Building
posted at 9/15/2008 10:19 AM EDT
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Posts: 2
First: 9/15/2008 Last: 9/15/2008 |
Philip--
You might want to include a Phased Retirement plan as part of your overall agenda. With Boomers beginning to retire in large numbers, companies will find it difficut to replace the retirees with new talent in a timely fashion. Today's retirees are often high-energy and willing to remain employed in a more flexible fashion on an as-needed basis by their former employer. Companies find it cost-effective to bring back their employees thru a 3rd-party service such as reEmploy.com. This alleviates any interference with pension benefits and is a hassle-free tool for employers. Feel free to contact me if you'd like to discuss further. Best regards-- Mary Lou |
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