Every person who begins to work thinks about an investment plan. The idea behind investment plans is to help individuals continue earning a certain income beyond retirements. Different firms that offer retirement plans invest in a diverse business with the view of generating an income for the people once they retire. They do so in order to diversify risk and ensure that the members of their retirement plans eventually can gain benefits from their retirement plans (Vanderhei, 2016). However, several ethical issues arise when considering retirement investment plans. Few people put into consideration the ethical implications of their retirement plans.
The first ethical issue that arises from retirement plans is the type of investment that the plan opts for. As already noted, firms that offer retirement benefit plans opt to invest in different fields. In some instances, such investments may go against one’s ethical and value systems. Few people take the risk to identify the exact investment that the organization is engaged in and decide whether such investments are in line with their value system (Mittelstaedt, 2004). Moreover, the majority of retirement plan organizations do not share with their members the exact investments that they will invest their money. Consequently, the people do not have the opportunity to make decisions of choosing retirement plans based on the exact investment that their money would be put and the decision of whether such an investment is in line with their value systems and ethical framework of judgment.
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Secondly, the majority of people who choose a retirement plan do not put into consideration the ethics of operations when considering the type of company to choose for their retirement plan investments. When choosing the type of goods and services to purchase, people often consider ethical issues surrounding the company that produces such goods and services. For instance, they consider how the company is conscious of environmental issues and whether the company treats its employees fairly. Such ethical considerations largely inform the consumers’ decision on whether or not to support a given brand or product. On the contrary, such considerations rarely inform people’s decision when it comes to the choice of retirement investment plans. They do not consider the ethical framework of operation of different organizations offering retirement plans before choosing one retirement firm (Mittelstaedt, 2004). It is important for people to consider the ethics in the operations of retirement benefit firms before choosing to invest in such firms. This will encourage firms to operate ethically.
Ethical issues are increasingly becoming an area of interest for social organizations as well as religious organizations. Such organizations are increasingly encouraging their members to engage in socially responsible investments (Mittelstaedt, 2004). Consequently, people are becoming conscious of the ethical implications of their investments in different retirement plans. For instance, people had become unsettled when they learned that companies in which they invested their retirement plans are being engaged in child labor or offer working conditions that are not safe for employees. As such, future investments into retirement plans are likely to be informed by ethical considerations.
In summary, ethical issues are often neglected when choosing a retirement plan in which people can invest in their retirement benefits. The ethical issues surrounding retirement investment plans include the compatibility of the investment activities chosen by the company with the individual value systems of the people who chose such an investment plan. The second consideration is the ethical framework that governs the operations and decision making of companies in which people invest for their retirement plans. Socially, and ethically responsible retirement investment will help build ethics in companies that offer retirement plans.
References
Mittelstaedt, H. F. (2004). Research and Ethical Issues Related to Retirement Plans. Journal of Business Ethics, 52 (2), 153-159.
Vanderhei, J. (2016). Retirement Plans and Prospects for Retirement Income Adequacy. Reimagining Pensions, 3 (4), 37-60.
