By Mansour Baker, PHRi, SHRM-CP
15 January 2018
15 January 2018
The Employee Savings Plan will allow company employees to contribute a percentage of their eligible salary pay for providing an important source of personal saving and encourage long-term employment with a company.
The employee has the option to choose his/her contribution to a fixed percentage (1% to 20%) of their monthly salary. Changes to these percentages (increase or decrease) should be allowed once every year during an employee participation in the plan and can occur on the same enrollment date. The monthly salary does not include overtime, bonus, allowances or any other benefits.
The table below outlines the percentage amount of a company contribution as of the enrollment date. To move to a higher bracket of a company contribution, you must complete a full year continuous contribution on the date of your enrollment in the plan.
Table 1: Sample Company Contribution
Eligibility of Company Contribution Share
If an employee voluntary resigns after completing five (5) continuous contribution years, they will receive their total contribution made during the plan and company contribution for the same period.
If an employee voluntary resigns prior to completing five (5) continuous contribution years, they will only receive their total contribution made during the plan period.
Employee Saving Plan Calculation Example
Sarah joined a company on 01 Jan. 2013 and she decided to enroll in the Employee Saving Plan on 01 April 2013 with a monthly contribution of 10% of her monthly salary. Her salary is $20,000 and she continued in the Employee Saving Plan for ten (10) continuous contribution years.
Table 2: ESP Calculation Example