Retirement Plan Proposal and Communication Plan


A benefit plan should provide employees with a wide range of benefits. The retirement plan should be in a position to motivate employees to work for the specific organization that is offering the plan. By succeeding in doing this, a company can have a reduced employees turnover rate. The plan adopted by the organization should also meet the objectives of the organization. In this proposal, I will lay down three retirement plans through which an employee can choose from. I will also state the communication plan which the company adopts in order to enhance participation of all employees in the retirement plan.

Types of Retirement Plans

Retirement plans differ from one company to the other. This is because specific companies have specific objectives which they must achieve through implementation of a given retirement plan. However, regardless of the organization, a good plan should enhance ability of employees to save for the future. It should also help them to have tax savings. The plans that this company propose are 401(K) plan, defined benefit plat and profit sharing plan.

401(K) Retirement Plan

The plan is available for businesses with a minimum of 25 employees. As opposed to the view held by many, the plan is not expensive as competition from organizations that offer this plan has helped to reduce costs associated with this plan. Maintenance of the plan is also cheap and the business needs not be big. All businesses are eligible for this plan (Cassidy, 2006). Employees in the company become eligible for this type of retirement plan as long as they have a minimum of one thousand working hours with the company over the period prior to application. However, employees who have worked for an equivalent period of time for two years are also considered in a case where there is no vesting period.

The minimum amount of contribution made by an employee depends on the age o the employee. For those who are fifty years and above, the minimum contribution is set at $ 22,000 with the rest required to make a minimum contribution of $ 16,500. Regardless of the age of an employee, a total contribution by both the employer and employee is required to be a minimum of $ 49,000. The vesting of employees is determined by the employer. This plan helps employees to contribute toward retirement. However, the plan can be costly in some cases and also faces the limitations of vesting employees.

Defined Benefit Plan

The plan enhances ability of employees to save. The minimum required contribution is lower for young workers as compared to the old employees. The plan is open to self-employed individuals and entrepreneurs. The requirement is that, an employee ought to have worked a minimum of one thousand hours during the vesting period in order to be eligible for this type of retirement plan. The employee is required to have worked for an equivalent number of hours in the last two years in a case where there is no vesting period (Cassidy, 2006). There is no minimum contribution for employers. This plan prohibits employees from making any contribution towards retirement. One of the benefits of this retirement plan is the guarantee for payments to employees after retirement. The disadvantages of this plan include lack of employees’ contribution and the high cost to employers.

Profit Sharing Plan

In profit sharing plan, employees are allowed to have a share of the profit generated by a company. The main aim of this plan is to motivate employees to work for the benefit of the company. Self-employed individuals and business owners qualify for this plan (Cassidy, 2006). To be eligible, employees are required to have worked for the company for a thousand hours in the previous period or an equivalent number of hours for the last two years in a case where there is no vesting period. In this plan, employees are not allowed to contribute. The plan calls for a minimum contribution from employers, equivalent to a quarter of employees’ salary and a maximum of $49,000. Employers have the role of determining the vesting period. This plan takes into account the variation of profits earned by the company.

Employee Retirement Income Security Act of 1974

The company is expected to meet a number of requirements laid down by the Employee Retirement Income Security Act of 1974. The act requires the plan to be employed to provide important information to all participants. The information should relate to the features of the plan and how it is funded (Cassidy, 2006). Therefore, any new information regarding issues above should be made available to participants from time to time. The act also requires employers to abide with retirement plan funding. They should also adhere to all standards set by the Act regarding vesting. As a result of this, a company is required to vest in the best way possible, its employees after a given period of time. The Act also gives employees a right to sue for compensation in case there is an existence of breach of fiduciary duty by the company. They also have the right to the benefits accrued from this plan. The payment of benefit from any pension plan is also governed by the Employee Retirement Income Security Act of 1974.

Communication Plan

Target employee population

The communication plan is an effective way through which the company will interactively share its retirement proposal plan to its employees. The target audience for the communication plan is one hundred and fifty members (150). The essence of the communication plan is to help the employee make a sound decision on the retirement proposal plan.

The Aim of the Communication Plan

The main objective of the communication plan is to provide the employee with first hand information regarding the three retirement proposals. It is expected that the employee will be free to choose a retirement proposal that meet their expectations. This will enhance employee participation for the proposed retirement plans (Niven, 2011). Apart from providing information on the retirement proposal, the communication plan also seeks in sensitizing the company’s employees the benefits of saving for the future. An absence of ongoing education program may affect the participant in making appropriate investment decision. A comprehensive and well detailed communication and education program will step to bridge the gap. It also seeks to enlighten the participants on the importance of diversifying their savings. The communication plan steps to offer resourceful information on challenges faced by the participants in choosing the right priorities. Thus to communicate its message, communication plan must be precise, comprehensible and clear.

Expectation from the Plan

The greatest expectation of the plan is for employees to have first hand information about the retirement benefits. From the communication plan, it is also expected that the employees will enroll in one of the retirement benefits. The desired outcome of the communication plan is to provide the suitability for each retirement benefit. After the communication program is completed, it is expected that the employees would have known the significance for each retirement plan, the benefits for each and why it is essential to have a retirement benefit. The program is positive that the employees will show interest in participating in any of the three retirement plans at their disposal.


The main concern for the communication plan is to encourage more employee participation in one of the retirement proposed plan. Apart from encouraging employee participation, the communication plan seeks to provide alternative saving for its employees through the chosen retirement benefit. The communication plan also strategizes at encouraging acceptance of the proposed retirement plans. In the long run, the company seeks to establish complete incorporation of the retirement plans.

Important Considerations

An effective communication method should be chosen in order to reach out for all employees. This will help in proper dissemination of information regarding the retirement proposals. The method of communication should be interactive enough to encourage feedback from the employees. This will help in gauging the reaction from the employees on what they think of the presentation or the proposal. The presentation should be use easy language for follow-up by the employees (Niven,2011). This will allow employees to seek clarification on issues which seems not to be clear. A healthy relationship should be built between the presenter and the audience to enhance persuasive communication on the issue at stake.

Method of Disseminating Information

An internal memo shall be used to inform employees about the meeting, its venue and time. This is to enhance one on one interaction between the employees and the speakers making the presentation. Several speakers should be allowed to make a presentation on each retirement proposal. The presentation can also consider bringing several experts to expound on contentious issues. One on one interaction has many benefits over other methods of communication. (Niven, 2011) It offers a unique chance for getting the necessary feed back. The meeting provides a platform for seeking necessary clarification on issues, discontent or stereotype with regard to proposed retirement plans. The plan will incorporate multimedia presentation and employee account internet access. Using internet access, information on the proposed retirement plan will be accessed on a daily basis. Moreover, there will be quarterly employer reports on the progress of retirement benefits. Custom enrollment materials will be provided during the presentation.

Employee Participation

One on one interaction is better in eliminating or reducing any resistance from the audience. This is by providing immediate clarification on the issues raised when the meeting is on course. Resistance to participation can also be solved by showing of exceptional commitment by Company’s management. A throughput discussion of the benefits accrued from the retirement plan should be enhanced to erase any possible doubts. These doubts if they go unchecked will eventually culminate to resistance.


Retirement plans come with a lot of advantages. These advantages extend both to the employer and the employee. The company gains by increasing the employee’s submission while the employee gains by having tax savings. Employees at some instances are provided with an opportunity to save some money. As a result of many benefits accrued from retirement benefit plan, adoption of the plan and encouraged participation of the employee should remain the topmost priority.


Cassidy, D. (2006). A manager’s guide to strategic retirement plan management. New York. John Wiley and Sons.

Niven, R., P. (2011). Balanced Scorecard: Step-By-Step for Government and Nonprofit Agencies. New York. John Wiley and Sons.