Sam Operates a Small Business with Twelve Employees

Question 161
Essay

Sam operates a small business with twelve employees.Sam says to his employees,"I'm not required to give you a pension plan,but I have decided to do so.The plan is that if you stay employed with me until you reach the age of sixty-five,I will give you a pension of $1,000 per year during retirement for each full year you have worked.Because I believe so strongly in this company,if I invest any money in the fund in advance,I will put half of it into stock of this company.If you leave before retirement,you don't get it.That way,you'll have more incentive to work hard and stay with the company." Comment on the legal aspects of this plan.