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Benefit Plan for Tertiary Sector Employee

   

Added on  2021-06-16

10 Pages2676 Words60 Views
Finance
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Benefit Plan For Tertiary Sector Employees 1BENEFIT PLAN FOR TERTIARY SECTOR EMPLOYEESStudent by (Name)Professor’s (Name)CollegeCourseDate
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Benefit Plan For Tertiary Sector Employees 2BENEFIT PLAN FOR TERTIARY SECTOR EMPLOYEESAbstract The research is about the factors to be considered in paying the superannuation funds.The factors include the Defined Benefit Plan and the Investment Continuance Plan. Some of thefactors include: age, time to retire and also the salary one is paid. Some of the ICP factorsinclude shares fund, trustee fund, and stable fund and secure funds. Issues associated with theTime value for money in decision making is also looked into details.IntroductionSuperannuation is the tax effective way of saving for the future. A good example is wherethe employees contribute their money to a pool, and the company or financial institution carryout business on their behalf to earn interest. Some employees in given companies would wish touse this approach because they believe that it is the shortest way of earning much interest fromthe saving. The employees pooled their money together, butthe investment is made by theprofessional managers on their behalf. After the payment of this money, one would not beallowed to receive it until him/he retires. In some cases, the government may decide to top upthis money to the low income employees. The employers also contribute to the super fund, butthe employer advised to make some contribution. The amount to be contributed by the employeeis always determined by the employer depending on the policies and rules that guide the paymentof the company. There is three main super fund contribution in the corporate financialmanagement. They include employer contributions, personal contributions and finally the governmentcontribution. For this report, the personalcontribution is the choice for the whole report. This is
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Benefit Plan For Tertiary Sector Employees 3where the employees are expected to make a pool payment which will be later used by themanagers to carry out business on behalf of their employees. For the self-employed people, theyare required to make their contribution to the super fund (Ingles 2009). The following are someof the ways one can use to make due to the super fund: salary sacrificing, the personal input fromthe pay, the bank transfers to the super fund and finally the super transfer to the super mainaccount. Retired benefits are very significancant for any employed person. Everyone believesthat after attaining the retirement age he/she should be taking something home as a benefit forhard work. For this reason, the superannuation is considered to be very useful to the life of theretired employees.Important factors that should be considered by the Benefit Plan for tertiary sectoremployees while deciding to place superannuation contributions in the defined benefit plan.Some of the factors to be considered include the following:Defined Benefit Plan-This the pension benefits plan where the employee is assigned theperiods of his service depending on the pension benefit formulae that havebeen used. This oneof the critical factors that should be considered in payment of the superannuation. For example,if an employee has worked for 40 years and has earned a total salary of $ 50000. Then thedefined benefit plan becomes 1%×40×50000=2000 (Social Security Administration 2013). Theformulae arevery crucial for the calculations related to the super funds. In the Defined BenefitPlan, the assigning of the payment depends on the period that has been appointed by theemployer by the benefits plan formula. For example, if the employee has worked for 40 yearsand the total salary is $50000 and has worked for 40years, this implies that the full payment to bemade is $2000. The Defined Benefit Plan is also affected by some of the attributes of the
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