Whether or not to include a retirement plan option as part of a company benefit package is not the easiest of decisions for many senior executives, or their boards. For others, depending on the business they are in, there is no choice. To compete for top-level talent some, it is imperative that such programs be offered.
In any case there are several questions that must be answered. First, and the most obvious is whether to have a plan at all. Second, the place of a retirement plan option within the overall benefits package needs to be taken into consideration. There should be different types of retirement plans available based on the kind of business and employees that one has. Perhaps a business’ healthcare plan is so robust that it overshadows the need for a truly comprehensive set of retirement plan options. Similarly, the pay scales may be so competitive, that they overshadow the long-term considerations implicit in a retirement plan program. Also, time off is a big consideration in today’s marketplace. Vacation times, family leave, sick pay and flexible work hours often are priorities. Another factor is work environment and management practices. For example, many candidates are interested in opportunities for promotion or whether they will be given the freedom to be creative. Any one of these factors alone, or some or all of them together may influence the type of plans and span of options a firm might offer as part of the entire benefit package.
Third, after the decision to move forward is made, including the general range of choices and options, comes the selection of those options. A major consideration, of course, will be cost.
Some of the expenses include:
- the cost of an outside administrator for the plan, or plans
- the selection of an investment managers,
- the salaries of people internally
- the costs and the systems needed to interface with employees, administrators, investment managers and general ledger accounting program
Another factor involves the decision of whether or not to include employee stock option programs, share builder incentives or share distributions either as part of, or complementary to, a retirement program, hence different types of retirement plans. This last item can either add costs or save money depending on the size of the company, the history of its earnings and other factors.
Some of the products that can be considered include a straight 401(k) with no matching funds; a 401(k) with matching funds, based on a percentage and time to vesting; a firm-sponsored retirement account that may or may not include employees and/or firm contributions… a hybrid may well include some form of stock purchase. There are, of course other options and other variables.
This is where The CMR Database comes in. If you want to compare what you are thinking about to what your competitors have, The CMR Database can do that for you. If you are searching for an administrator at the best possible price, The CMR Database can compare services and prices across the nation, or the World for that matter. Who will invest your employee and firm contributions? You can find the right investment manager for your business as well. Here again, countless brokers and money managers can be found. And if you’re searching for the best ways to manage the risk of setting up your retirement benefit option with different types of retirement plans, The CMR Database contains the consultants and risk professionals who can help you with that too.
One stop—Compare, search, analyze and select the best services, analytical tools and consultancy services available from around the World. It’s all here on The CMR Database.