(Assignment) Human Resource Management - 401k

Running head: HUMAN RESOURCES MANAGEMENT
Human Resource Management
Name of the Student
Name of the University
Authors Note

HUMAN RESOURCE MANAGEMENT1
1) A 401k is considered to be a qualified retirement plan which permits that the appropriate
workers of an organization in order to save money invest for their personal retirement on
the basis of deferred tax. An employer is the only person who is permitted to sponsor a
401k for its workers. An employee usually determines how much money he/she is able to
contribute and on the basis of program conditions and IRS rules, that particular amount
will be deducted from the paycheck of the employee and will be deposited to the plan
(Clark, Maki & Morrill, 2014). Sometimes it has been observed that the contribution has
been made by the employer to the plan, but it happens very rare and it is optional. It is the
duty of employers (which is also known as the sponsor of the plan) to administer the
scheme according to the laws, rules and necessities of the aforementioned scheme. It
includes determining who is entitled, how much amount and when the employer can
contribute, how much will be contributed by the employer to the scheme, which
investment alternatives is available to the employee, the number of times an employee
can reallocate the capital, the sellers that are required to run the scheme and the
functionalities of the plan, whether loans will be permitted, hardship retirements will be
permitted (Choi, Laibson & Madrian, 2004).
For the employees, this plan has both merits and demits. Such as:
Merits: A 401(k) attracts workers because it offers a simple, economic way for pension
plans by tax submitted contribution to an investment account.
Demerits: Under this plan, an employee will be compelled to take out entire money after
attaining a particular age bracket and cannot contribute to the plan further.
2) Social Security is such a scheme in which individuals with insufficient or no income are
assisted monetarily. In the US, it is generally known as a social security net or welfare,