When recommending your defined contribution formula, did anyone recommend an additional amount be added to their "Initial Account Balance" (IAB)? The office manager won't get to a 70% replacement ratio, even when maxing out to 15%/15% and she doesn't own any part of the company that could compensate her for not getting to the 70% target. I feel like I could just recommend 15%/15% to get everyone who isn't there as close as possible, but the assignment already said Chocolate Factory didn't like that idea because it is not compensating their employees well enough for past service.
The only way I can think of for compensating employees for past service is to add money to their initial account balance, but it doesn't say if this is allowed and this seems like a lot of money to lay out all at once (going over the 15-18% budget in a given year). I know I can just state all these as my assumptions, but wondering what anyone else's take on it was. Thanks!
The only way I can think of for compensating employees for past service is to add money to their initial account balance, but it doesn't say if this is allowed and this seems like a lot of money to lay out all at once (going over the 15-18% budget in a given year). I know I can just state all these as my assumptions, but wondering what anyone else's take on it was. Thanks!
EOM3 Task 5
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