Savings and Retirement Plan
- February 7, 2017
- Posted by: ACTUARIA
- Category: Recent Publications
A Savings and Retirement Plan is a voluntary system where employees of a company make personal contributions to a common fund to encourage savings. The employer also makes contributions as a percentage of the economic contributions made by each employee. On the other hand, the contributions made are invested to obtain the highest possible profitability.
The following are the benefits of implementing a Savings and Retirement Plan for both the employer and its employees.
• The monetary contribution made by the employer is considered as an additional benefit to employees, increasing their job satisfaction.
• Encourages retention of employees if the percentage of employer contribution is increased by the number of years of service of each employee.
• Complementary to Social Security.
• Greater economic stability for employees.
• If its management is adequate, the yield of the funds may be higher than the market´s average.
• There is the possibility of loans for employers.
• Diversification of investments and therefore, lower financial risk.
• The administration of the fund should be supervised by experts, monitoring possible contingencies.
Although there are important benefits of incorporating a Savings and Retirement Plan, both for the employer and for their employees, the establishment of the percentage of contributions, its regulation and the management of investments must be conducted by specialists in the subject.
ACTUARIA offers consulting services in the creation of Savings and Retirement Plans at the corporate level to establish the parameters that allow the fund to function properly.