Retirement options on US lines

THE Government is considering the replication of an American investment vehicle, the US 401(k), which allows employees to save and invest for their own retirement.

Under this proposal, an employee can authorise his employer to deduct a certain amount of payback before the taxes are calculated.

The amounts so deducted can then be invested in investment options chosen by the employees from the ones offered through the company's plan. These investment options may include mutual funds, guaranteed investment contracts, and so on. As per the proposal, the employee need not pay tax when the investment grows, but only when the amount is drawn at the time of retirement.