A retirement system is very important for teachers, consultants, employees, public servants and other people who are seeking lifetime security. It can be a lending hand for your future needs when it comes to finances and other necessities in the family. It is no wonder then, that many people try to set-up a group retirement system. In building one there are some things we should keep in mind.
The Retirement Board Group
In setting up a retirement system, you should have a board of trustees. The Board should consist of elected representatives as advised by the governor and senate. As obvious, your group retirement system should be a legal one. There should be a meeting once a month for the board members.
Job Requirement and Membership
After electing the board members, start focusing on the criteria for eligibility when it comes to membership and job requirements. If you’re planning to start a teacher retirement system, then obviously your members should be teachers. On the other hand, if you wish to establish a state retirement system, then the members should have a title of government servants or public employees.
Eligibility can also be determined by age and health status. Are you going to accept a 30-year old teacher as one of your members or should he be at least 40 and above? Are you going to appoint an examining physician for the members or you will let them look for their own doctors to have a health check?
Moreover, a person should meet the criteria for membership before he can move to job requirements. So before finally accepting their membership you might want to check first their performance when they were still working. Are they working full time or part time? Did they perform well during their working days? Gathering all this information is quite difficult but you can ask them to answer an application form to unload this heavy burden.
The Retirement Service
Of course, as you start the retirement system you should have knowledge of how it runs. People will be more convinced to join your group if your retirement services are persuasive. But like the others, you should have criteria before they can avail of the services. For instance, they should have been at least in 10 years of service. Furthermore, here are some of the retirement services you may want to include in your system:
- Service Credit – Your members will receive a service credit every once in a month for every contribution of full pension.
- Vesting – Your members will have a 100% full guarantee that they will receive their retirement benefit upon reaching the age of 55.
- Loans – Active members can borrow straight from their own account twice every year up to $50,000 - $60,000. But then, you can set your own maximum loan per year.
- Pension System – This is a fixed sum received by your members as a form of reward or favor. This might also be similar to vesting.
Truly, a retirement system is very helpful to our future financial security. This guide will help you to become one successful founder of a group retirement system.