Each employees salary into retirement account

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Reference no: EM13851940

Currently a firm pays 10% of each employee’s salary into a retirement account, regardless of whether the employee also contributes to the account. The firm is considering changing this system to a 10% match, meaning that the firm will match, up to 10% of each employee’s salary, the employee’s contributes into the account. Some people at the firm think this change will lead employees to save more and therefore to be able to afford to retire, while others at the firm believe this will lead employees to have less retirement savings and therefore be less able to afford to retire. Explain why either point of view could be correct.

Reference no: EM13851940

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