Reference no: EM133196966

Philpot Chemicals is contemplating the introduction of a retirement plan. The company has been in business for six years, has 250 employees, and has found a market niche that promises to provide them great opportunities for growth over the next several years. They have developed an average benefit package for a firm of their size, but know that having a retirement plan would complete their benefit offerings and help them to attract new talent. The Executive Committee assigned with the task has been discussing the advantages and disadvantages of several types of retirement plans. They have asked you to assist them in making a final decision. Discuss in detail the following questions.

Part A: When deciding on whether to utilize a defined benefit versus a defined contribution plan, Philpot should consider what factors? What would your recommendation be?

Part B: If a defined contribution plan is considered the most appropriate form of retirement benefit, what considerations would determine whether to offer a Profit Sharing Plan, a Money Purchase Pension Plan, or a Target Benefit Pension Plan?

Part C: Philpot is leaning towards a 401(k) plan. Go to the Internet and research how other companies are designing their programs and then make your recommendations to Philpot on the provisions you would suggest they incorporate into the plan. At a minimum, you need to cover Eligibility, contributions, vesting, investment options, loans, and hardship withdrawal provisions.