Retirement Plan Proposal and Communication Plan

Retirement Plan Proposal and Communication Plan

Planning for retirement is often times an afterthought for most employees. In today's economy, many individuals are focused on the here and now rather than what they need years down the road. Because of this, employers are struggling to find ways to encourage employees to contribute to retirement plans that are set up to save for the future. It is essential that employers are familiar with the various retirement plans available, and have a plan in place to communicate the options to employees and encourage them to enroll. As an HR leader for a newly formed organization, I have been asked to create a proposal and communication plan for management that describes two possible retirement plans that the organization could implement. This proposal will discuss the possible plans, requirements of the Employee Retirement Income Security Act of 1974, communication of the plan, and ways to encourage employee enrollment in the plans.

Human resource managers have a crucial part in creating and implementing benefit plans. Retirement plans are often overlooked when developing those plans leading to a low number of participants. Creating retirement plans that encourage employee participation is only the first steps. HR managers must also find creative ways to communicate the plans available to employees as well as ways to give them a level of control over the plans so they feel that they have a say in how their money is being invested. In addition, there are also strict regulations that must be followed under the Employee Retirement Income Security Act of 1974. Two plans available that could be implemented for a company with 150 employees would be a traditional 401K plan or a profit sharing plan.

Employee Retirement Income Security Act of 1974

The Employee Retirement Income Security Act of 1974 (ERISA) was enacted to set guidelines that must be followed in order to protect employees participating in employer paid retirement plans. According to the United States Department of Labor (n.d), "ERISA requires plans to provide participants with plan information including important information about plan features and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty" (para. 2). When implementing a retirement plan, HR managers must be sure that they have someone on hand who understands all the regulations in this act to ensure that the company is in compliance.

401K Plans

A 401K plan is a commonly used retirement plan among organizations due to the flexibility and security that these plans offer. Not only do 401K plan help