Question

3. Your friend has started a new software company and is considering starting a pension plan for his employees. He only

has 20 employees today, but he expects within five years he will have a couple of thousand employees. He has come to

you for advice. Discuss the pension alternatives and factors he should consider

Answer 1

The following can be the alternatives for pensions and the factors that be considered:

- "Save as you earn scheme"

For the employees of a software company, employers can encourage the employees to be a part of the "Save as you earn scheme" in the organization. Employers can grant employees a discount of up to 20% of the share price at launch. At the end of the period, employees can choose either to use the money that they have saved, plus the bonus they earned to buy shares if it would generate a profit, or have their contributions returned if this can give the higher return.'

-People's pension

As the company is planning to extend the employees base in the coming years, it is a law that they enroll the employees on The People’s Pension. The employees can opt-out but can have multiple pension sources. The employer can educate the employees about this scheme so that they can feel motivated and connected with the firm. The employer must tell that each pay period you will automatically pay an amount into the People’s Pension, along with a contribution by the company.