Defined Benefit Plan: Investment Options for Tertiary Sector Employees

DEFINED BENEFIT PLAN
Module Number-
[DATE]
HEWLETT-PACKARD

Table of Contents
Introduction............................................................................................................... 2
Different plans of Superannuation................................................................................... 2
Investment choice plan.............................................................................................. 2
Defined benefit plan................................................................................................. 3
Factors considered by tertiary sector employees in deciding whether to place their superannuation
contributions in the Defined Benefit Plan or the Investment Choice Plan....................................3
Issues relating to the concept of the time value of money, taxes etc., might be important in this
decision-making process............................................................................................... 5
Conclusion................................................................................................................ 6
References................................................................................................................ 7

Introduction
With the changes in time, each and every employee need to strengthen their
investment options to increase the available return on capital employed. However, there are
several investment options which could be used by employees to increase their return on
investment such as tertiary investment option, defined benefit plan, superannuation
investment option. It is considered that tertiary sector is successfully fulfilling the servicing
needs of the people. Service requirement and its fulfilment is left with no gap these days. The
tertiary sector is satiating the needs of the people in every possible way as this sector is
working out in this provision. This way the economy is no longer facing the problem related
to consumer demand related to high quality. The development of an economy is determined
by the fact that whether the primary and secondary sectors of the economy are moving
towards the tertiary sector. Financial institutions, schools, restaurants, transportation and
salon are some of the basic examples of tertiary sector.
The sector also has employees who are called tertiary sector employees that work in different
fields that get to business running. Such employees are benefitted as well as they get some
rewards in addition to the basic salary that they get. The benefits are in cash or maybe in
kind. There is superannuation contribution as well which lets their future get better and
secure exactly like pension fund. Both the parties that is the employee as well as the
employer make contribution to this amount and it keeps on increasing. This creates a sense of
financial security amongst the employees as a small contribution done today can help in
saving their future. However, the contributions vary differently in different economies.
Different plans of Superannuation
The following are the different options of investments that are used in the tertiary sector for
their employees to help secure their future. However, the selection of the particular
investment option is based on the available return on investment and associated risk with the
investment plans (Bae, et al. 2018).
Investment choice plan
This plan makes sure that the employees invest the amount in an investment portfolio. The
deduction is done on a fixed percentage of the salary of the employee and there is no other