Thank you for providing me with the opportunity to partner in [CEO’s COMPANY]’s overhaul of retirement plans offered to employees. The proposal for these new retirement plans outlines two unique options apart from standard 401(k) plans commonly offered by companies as well as the benefits these new plans provide.
SIMPLE IRAs and ESOPS
Two options for new retirement plans that could be offered by our company are Employee Stock Ownership Plans (ESOPS) and Savings Incentive Match Plan for Employees (SIMPLE) IRAs. Each of these plans provides significant tax benefits suitable for our company and is fairly manageable. Contributions to SIMPLE IRAs and ESOPs including cash and stock are tax deductible. SIMPLE IRAs have higher contribution limits than ROTH and traditional IRAs because they are cheaper to set up and run than many other retirement plans. Employees eligible for ESOPs can buy stock directly and be given it as a bonus or obtain stock through a profit sharing plan. The plans properly follow the strict guidelines of the Employee Retirement Income Security Act of 1974; that way employee assets are protected and the minimum standards of the retirement plans are achieved within in our industry.
- CNN Money. (2017). Ultimate guide to retirement. Retrieved from http://money.cnn.com/retirement/guide/selfemployment_SIMPLEIRA.moneymag/index.htm?iid=EL
- Employee Benefits Security Administration. Retirement plans and ERISA FAQS. United States Department of Labor. Retrieved from https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/retirement-plans-and-erisa-consumer
- National Center for Employee Ownership. (2017). How an Employee Stock Ownership Plan (ESOP) works. Retrieved from https://www.nceo.org/articles/esop-employee-stock-ownership-plan