Research Paper on:
Different Types of Benefit Plan Packages

Unformatted Sample Text from the Research Paper:
Introduction Stock options, vesting, defined contribution, defined benefits and so on are all terms used to describe different employee compensation packages. These terms, however, can be confusing, therefore, we  begin with an explanation of some of the terms to be used in the following pages. Explanation of these terms will be expanded during discussion. * Defined benefits plans -  these plans give employees a specific benefit or certain benefits for a specific amount of time after they retire (Alexander Hamilton Institute, Inc., 2002). * Defined contribution plans -  these plans provide an individual account for the employee based upon the amount contributed to the plan plus earnings and losses. These plans include: profit-sharing plans, employee stock ownership plans;  money purchase pension plans; and 401(k) plans (Alexander Hamilton Institute, Inc., 2002). * Vesting - this is what happens within certain specified periods of time, when employees have the  right to receive the retirement benefits promised by their employer. Benefits may vest when employees terminate employment but before they actually reach retirement age (Alexander Hamilton Institute, Inc., 2002).  For example, if the vesting period were five years, the employee might be able to purchase 20 percent of the stock option package each year over the five years or  it might be an accelerating schedule where the employee could purchase 10 percent the first year, 20 percent the next year and so on (Corrigan, 2002). * Stock option  plans give employees the right to purchase shares of the companys stock for a specific price during a specific period of time. The employee is not obligated to purchase the  stock. Typically, options are granted at current market value and last up to ten years. More often than not, companies have a four or five year vesting period with their