Guiding Questions Flashcards
Unit 1 - What benefits does an employer receive by offering a retirement plan?
Retirement plans provide important benefits that help recruit and retain employees. Employers can deduct contributions they make to the plan from taxes.
Unit 1 - What kinds of laws and limitations must an employer follow when providing a retirement plan?
Employer-sponsored plans that are qualified are regulated by the DOL and the IRS under ERISA (the Employee Retirement Income Security Act). ERISA ensures that plans do not discriminate against lower-paid employees. It also requires certain notifications and disclosures and sets limits on how much money can be contributed to the plan.
Unit 1- How could participating in a work-sponsored retirement plan help employees save money?
Depending on the plan type and options available in the plan, employees can save more through the ease of the plan (automatic payroll deductions), tax benefits (tax-free earnings or tax-deferred contributions and earnings), and employer contributions.
Unit 1 - Are employer-sponsored retirement plans actually effective in helping people save for retirement?
Employer-sponsored retirement plans make it easy for individuals to save for retirement. Employees are much more likely to save through an employer-sponsored retirement plan than on their own.
