RETIREMENT PLAN 1 Retirement Plan Communication Total Compensation HRM 324 RETIREMENT PLAN 2 Types of Available Retirement Plans As a Human Resources manager of a newly formed organization I would first consider the two types of retirement plans which I could make available to the employees as well as how each plan works The first plan to consider is the Defined benefit plan where the amount of benefits to be paid at the time of the retirement are calculated using the formulas It is usually paid each month The second plan is the defined contribution plan where the amount of future benefits available to the employee are based upon the amounts contributed to the plan by the employee and the employer It is also based on the interest that is earned over time The Defined Contribution plans include the plans like the Profit Sharing Employee Stock Ownership plans ESOPs Savings Incentive Match plans for the Employees SIMPLE Simplified Employee Pension plans SEPs and the series 401 k s 403 b s and 457s Communication Methods and Frequency In order to ensure that the plan is successful employee participation is very important and clear communication is key A qualified expert consultant should be hired to design the plan and then explain the benefits of the plan to the employees in groups The employee s need to be educated and informed regarding the nature and the benefits of the plan and this should be on a continual basis Updates to the plan need to be made available in a timely manner so that employee s are kept up to date on a regular basis It should never be that the employee was not made aware of a change and suffered because of lack of information about their plan The company should encourage the employees to the plan by ensuring that different investment opportunities are available within the plan Gone are the days when there were only three or four options The average plan must be equipped with 18 options In an effort to encourage the employees the plan needs to be furnished with 11 to 20 options In order to achieve buy in as well as attain a level of trust of the plan from the employees the company needs to explain to the participants of the plan that the investment options are being examined and monitored by the company In addition the financial advisors should have face to face meetings with the participants to ensure them that the retirement goals will be met The employees should have the access to the information to make sure that the employees feel that they are part of the retirement plan The company needs to conduct 401k meetings to communicate the benefits and the features of the plan to the employees When we talk about the participation of the employee in the 401k plans it is important to for the company to have personal communication with the employees The research shows that the employees having access to individualized statements contribute 0 85 percent more of salary than the employees who do not get such information The company using individualize statements to inform and tell the employees about the 401k plan have a higher rate of participation as compared to the companies which do not use the individualize statements The companies which communicate the issues concerning information regarding time value of money are able to attain much higher employee participation The research and studies have revealed that the targeted communication for the employees is one of the proven success strategies to change employees behavior and increase the value of the 401k plan Overcoming Resistance No matter how clear the communication there will always be some resistance to change and its important to factor in the best way to deal with resistance We can overcome the employee resistance to participation in the plan by designing a plan that meet the goals and objectives of the company and making sure that the plan is according the employee demographics Furnish the plan with the useful information and tell the employees about the features and the benefits of the plan Provide the employees with the facility of loans and hardship withdrawal options Tell and educate the employees that there are a wide range of investment options available to them In addition we will equip and furnish the plan with all the relevant information to make the plan more attractive for the participants The plan must be communicated in way that tells the employees about the features and the benefits of the plan If we are successful then the resistance will be easily converted to excited employees about what their future entails as a result of a solid retirement plan References Retirement Plans Benefits Savings retrieved from http www dol gov dol topic retirement typesofplans htm How To Increase Employee Participation In Your Retirement Plan retrieved from http www bpp401k com articles how to increase employee participation html DEVELOPING EMPLOYEE COMMUNICATION PLANS retrieved from https www ta retirement com resources TRS5071B 1007 20Employee 20Communications 20Workbook pdf