Learning your GICs

Article Abstract:

Human resources professionals should understand the investment options that are available to employees participating in 401 (K) plans to enable the workers to make wise decisions. When given the opportunity to pick a retirement vehicle, most employees select guaranteed investment contracts (GIC) instead of stock, bond, or balanced funds even when GICs may not be the best choice. GICs can be a good choice for employees 50 years of age or older because of the short time before they retire, but younger employees have enough time before retiring to deal with the higher risk but possibly larger gains from other investment choices. When analyzing both participating and maturing GICs, and all their variations, HR professionals should examine various considerations, including the ability of the guaranteeing insurance companies to pay interest rates and protect principals, contract provisions, and net rate of return.

Analysis, Practice, Human resource management

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Fast and flexible 401(k) plans

Article Abstract:

Employers are under increasing pressure to provide flexible 401 (k) plans that give employees access to their funds and enable them to transfer assets between funds. Transaction-based valuations grant greater investment flexibility and quicker distributions turnaround while keeping investment management and recordkeeping responsibilities separate. This method also allows the efficient use of guaranteed investment contracts.

Usage, Accounting and auditing, Employee benefits

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