FIN200 corporate financial management - Assignment

FIN200 Assignment T1, 2018

TABLE OF CONTENTS
Introduction................................................................................................................................3
Retirement investment planning................................................................................................3
Defined Benefit Plan or the Investment Choice Plan.............................................................3
Factors to be considered to determine to place their superannuation contributions in the
Defined Benefit Plan or the Investment Choice Plan.............................................................4
Issues related time value of money and taxes in decision making procedure........................6
Conclusion..................................................................................................................................7
References..................................................................................................................................9
References................................................................................................................................10

INTRODUCTION
In order to stimulate the habit of saving, the Australian government has acted as a support
system, minimum efforts, charges and contribution fees are obliged on super plans so that
employees can have the benefit of savings in their future retirement period (Prast and van Soest,
2016). Since the importance of savings is increasing amongst the employees, it is essential for
the firms to provide them necessary superannuation plans while providing them with the
appropriate knowledge of the same, to make it simple for the employees in choosing the best
plan. The present study is based on the analysis and evaluation of the most suitable
superannuation plan for tertiary sector employees to make investments and savings at retirement
age. It is focused on Factors to be considered to determine to place their superannuation
contributions in the Defined Benefit Plan or the Investment Choice Plan. Further, it includes
Issues related to decision making procedure.
RETIREMENT INVESTMENT PLANNING
In order to eliminate the forces pushed by social security system regarding pension plans, the
introduction of low contribution level was made, supported by firms and government to promote
higher savings for retirement stage. In Australia, there is the presence of viable and fair
retirement laws that help employees in choosing their respective superannuation plans based on
their need, expectations and wants (Clark, Lusardi and Mitchell, 2015). In the present era, it is
significant for the employees to get aware and realize about the retirement planning and selection
of superannuation plan to determine their retirement objectives as a whole. Considering the case
of tertiary employees, their employment life is short, so they must do proper planning for their
retirement to save their earnings in a viable manner. The organizations wherein tertiary
employees are working offer them two type of retirement plan in order to safeguard their future
and help them in managing their financial targets. These pension plans are Defined Benefit and
Investment Choice plan.
Defined Benefit Plan or the Investment Choice Plan
Defined benefit plan