Retirement savings are crucial to cushion employees from life after employment. Under the Employee Retirement Income Security Act of 1974, the organization is mandated to inform all the employees about the various retirement plans it will offer, including all facts about finances, rules, and the management of these plans. As such, each employee will receive a summary of each plan before deciding which plan to join. The summary plan document will inform each participant how they can join, who is obligated to register, how savings and benefits are calculated, and how to file a claim against the organization regarding savings. The company will comply with the above guidelines, among others of fiduciary responsibilities stipulated by the Act.
The organization has proposed to offer retirement plans of 401k, Roth IRA, and HSA. Individually, the 401k retirement plan guarantees eligible employees a tax-differed savings and investment plan (Tacchino, 2020). The employee decides the amount they want to invest in the plan, and employers can choose to make additional contributions to their employees. The plan and subject regulate limits to be invested in the plan to IRS provisions. The Roth IRA is a qualified retirement account in which eligible members pay taxes on the money they contribute to the account then withdraw the amount in the future, tax-free (Tacchino, 2020). The IRS limits what amount can be added to the Roth IRA; hence the contribution amount changes periodically. In essence, Roth IRA accounts are best suited for people who believe that they will pay more taxes during retirement than now. Lastly, the Health Savings Account (HSA) retirement plan offers a tax-advantaged account for high-deductible health plans (Anspach, 2020). Eligible members can save money before tax into these accounts and use the same funds, later on, to pay for their medical expenses.
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Employees should take advantage of one of these retirement plans. The company will organize a workshop to educate employees more about these plans. The HR department encourages employees to participate in the 401k plan, as it is easy to manage and operate. Moreover, apart from each person's contributions, the company will offer additional contributions for all employees who choose the plan. The incentive will be sufficient to warrant a better retirement plan compared to the other saving plans.
References
Anspach, D. (2020). Here's why you might want to fund an HSA instead of an IRA . The Balance. https://www.thebalance.com/hsa-vs-ira-you-might-be-surprised-2388481
Tacchino, K. (2020). Where should you put your retirement contributions? MarketWatch. https://www.marketwatch.com/story/where-should-you-put-your-retirement-contributions-2020-05-04
