Tertiary Sector of the Economy (PDF)
Added on 2021-05-30
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Tertiary employeesDefined Benefit plan Superannuation ContributionName of the Student-
Executive summaryWith the changes in time, each and every tertiary sector employee’s needs to evaluate which investment option will render more benefits to their capital investment. Investment of the money is preferred by the tertiary employees working in financial segment of the economy sector. Employees invest their money in different investment schemes to get a regular income even after their service of employment and for several other benefits. For this there are mainly two types of investments as “Defined Benefit Plans” and “Investment Choice Plans”. Both the plans have different impacts of the issues related to the time value of money, tax, benefit estimation etc. These factors influence the decision making of the employees while choosing the best investment plan to get the beat investment returns.
Table of ContentsExecutive summary....................................................................................................................1Introduction................................................................................................................................3Investment plans.........................................................................................................................3Tertiary sector............................................................................................................................4Defined benefit plans.................................................................................................................4Investment choice plans.............................................................................................................5Factors affecting decision making of Tertiary sector employees or Investment issues.............6Inaccurate estimates...............................................................................................................6Time value of money.............................................................................................................6Taxes......................................................................................................................................7Recommendation........................................................................................................................8Conclusion..................................................................................................................................9References................................................................................................................................10
IntroductionAll the three sectors of an economy have a defined time period for the services of their employees. After completing the services period everyone needs money to live a healthyand wealthy life even after their service period. For this they need a continuous income for the rest of life, in this order employees make some investments in different investment schemes or plans. Some of these investment plans are made by the employer specifically for their employees and some are made by the business organizations which are need to be selected by the employees individually. This report consists of the description of defined benefit plan and investment choice plan. Report also consists of the different issues associated with these plans related to the time value of money and taxation. The tertiary sector employees needs to analysis the tax exemption, interest rate and return available on theinvestment options. If the tertiary employees are having mind set to entertain high risk in their investment option then investment choice option would be more beneficial for the tertiary employees.Investment plansA systematic investment plan is the one in which investors make a regular payment ofpredefined amount into a trading account, retirement account, or in a mutual fund depending on their suitability for the return schemes of the respective plans, and benefits the long term advantages of the dollar-cost averaging that involves buying of a fixed dollar amount as the security regardless the price variations. Investment plans are made for the convenience of employees for the regular savings without any extra effort except the initiation of the systematic investment plan. For making funding payments and buying new shares as well for the investment, a money market account or some other liquid account is used.
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