Reporting Paper- Executive MEMO



Reporting Paper- Executive MEM0

To: CEO

From: Controller

Dated: 2nd June, 2012

Subject: Contribution, Benefit and other Postretirement plans

Being a controller in your company it is my duty to discuss the Contribution, Benefit and other Postretirement plans as we have recently acquired 100% rights of another company. Looking at our financial condition it is better if our company to be aware of the concept of Contribution, Benefit and other Postretirement plans, what must be added to employee benefit and what must be eliminated in order to avoid discrimination. As the employee retired, they rest of the life is based on the fixed income which mostly depends on the pension plan from their company. Pensions are calculated on the salary they received during their career and the duration they have spent in that company. Along with the pensions, majority of the retirees given benefits which are relate to the other postretirement benefits (www.p4peid.org).

The main pension plans are characterized as defined benefits and defined contribution plan. With defined benefit plan, the company assures to the employee that they will receive certain amount of the money which has been deducting from their salary during their employment which will benefit them after their retirement. Whereas, defined contribution plan is concerned, the company assures and guarantees to the employee that certain amount of money would be contributed by the company in the employee plan.

A plan may be amended to change the nature of benefits earned later, provided the modifications comply with the Act of 1985 Benefits Standards Board (the "PBSA") along with plan provisions and relevant documents. With respect to benefits accrued to the date of termination, the administrator can:

Maintain their status as either defined benefit (see section 2.1 of this guideline);

Provide each participant is to replace the benefits accrued by a equivalent sum transferred to a defined contribution account (see Section 2.2 of this guideline).

The administrator may result in certain categories of participants, including those taking retire over the next ten years, the opportunity to convert their accrued benefits. Benefits accrued to the date of conversion whose status remains unchanged, the administrator can or maintain a pension fund for such benefits or purchase annuities for the guarantee (see section 2.2.1 of this line director.

Accrued benefits secured by the purchase of an annuity An annuity purchased must offer essentially the same benefits as diet, there including death benefits (Articles 22 and 23 ...