美国研究生课程-福利管理401K基础知识

Investment Policy
• State what the overall goal of the company is in offering the 401 (k) and how it will be administered
• Should have an investment committee
to 3%
Defined Plan
• Very expensive • Retirement of the past • State System
Defined Contribution
• Employee stock ownership—company allocates number of shares to employee
Welcome
Info
Why Save Benefits
Process
2030 2.2 workers per Social Security Recipient
Your Role
Social Insecurity?
• People are living longer i
• Most likely, you will enjoy 20-30 years of retirement
• Deferred profit sharing—company contributes an amount of profits each year
Company Makes Decision
• Decides to Offer • Decides on Matching Contribution • Decides on Safe Harbor v. Regular • Create a 401 (k) Committee • Picks Provider
Taxes are taken from the 401(k) account upon withdrawal.
This is a hypothetical example for illustrative purposes only and not meant to represent the investment return of any of your plan’s options. Your situation will vary.
– Very important to document provider choice
Chief Duties of Retirement Plan
Committees
• ADMINISTRATION • Design plan. • Choose and monitor third-party record keepers, other service providers. • Ensure government compliance. • Amend plan document as needed. • Handle employee communications. • Decide benefits claims and appeals. • Provide for financial education. • INVESTMENT MANAGEMENT • Write and ensure adherence to investment policy statement. • Choose specific investments or recommend them to full committee. • Hire and monitor investment managers, other service providers. • Review investment performance and make changes as needed.
Flexible withdrawals
• Termination of service • Retirement • Financial hardship
Withdrawals prior to age 59½ may be subject to a 10% penalty tax unless rolled over to an IRA or eligible employer plan.
Agenda
• Review Exams • Talk about Applied Knowledge and Goal
moving forward • Overall Goal of a 401 (k) Plan • Company Responsibility • HR Responsibility • Individual Responsiblity • Exercise
Lower current taxable
income
Ed’s 6% Regular Savings*
Jane’s 6% Plan Savings
$25,000 0
25,000 -3,750 -1,913 -1,500
$17,837
annual base wage pretax contributions pay subject to income tax tax** Social Security regular savings spendable income
See sample Fiduciary Service Timeline
Good Advice from HR Magazine about Committee Responsibility
• These nuts and bolts of setting up and running a committee may not be glamorous, but the devil is in the details. Following the three P’s—prudence, process and procedure— can result in a well-functioning committee that provides the best retirement plan for participants while insulating top executives from legal liability.
Info
Introducing Today
Process
Your Role
Social Insecurity?
1940 16.5 workers per Social Security Recipient
2005 3.3 workers per Social Security Recipient
Source: Social Security Administration, 2006 OASDI Trustee Report
404C Compliance
• Very Critical to HR Field • Erisa Section 404 (C) provides limited
fiduciary relief to plan sponsors, assuming participants can exercise control over their accounts. • EMPLOYERS MUST EDUCATE BUT CAN NOT GIVE INVESTMENT GUIDANCE AND/OR ADVICE
Did you know?
According to the U.S. Census Bureau, in 2005 there were over 70,000 Americans age 100 and older.
This is expected to increase to 1.1 million by 2050.
Vesting schedule
• Your entitlement to the employer’s contribution portion of your account
– You are immediately Vested 100%
Now add the match [100%]
10 years
401 (K) Basics
What you should and need to know!
What is a 401 (k) Plan
• Enron crash and people running around saying 401 (k) was a bad idea
Retirement
• Defined Benefit Plan For example State Retirement System based on last 3 years salary average * the number of years of service as a percentage
• Defined Contribution Plan—401k • Typical match is 50 cents on the dollar up
$31,824
20 years
$102,590
30 years
$259,947
Assumes a $20 weekly contribution, 100% match, and an 8% annual return compounded monthly
This is for illustrative purposes only and not meant to represent the return of any of your plan’s investment options. Your situation will vary.