I have a proposal on how companies can invest in employee savings/retirement using STEEM

Do you want your employer to match your STEEM investment?

I was inspired by @organduo who asked the question about STEEM salary. This got me thinking about how to compensate employees using STEEM and I came up with a concept on how to make it happen that mimics a company match investment bonus.

Here is the link to the blog.
https://steemit.com/steem/@organduo/steem-salary

By the way, I found @organduo's post in @pennsif's SOS Daily

Are you are familiar with a 401K (retirement investment)?

Here is a concept that would be similar to how a 401K would work using Steem Power.

First, a simple explaination of how a 401K works.

In a 401K, an employee has an option to invest a portion of their salary. The employer can match that investment up to a certain limit set by the employer. This investment matching is an incentive for quality employees to want to work at the company. (For instance, the employer can offer matching of the employee investment of their paycheck up to 8% when the industry average is 4%). Anything over that amount will not be matched by the employer. That works because the employee is not allowed to remove those funds without a penalty which is built into the 401K system. There are also tax penalties before retirement as taxes are normally waived during the investment.

That system doesn't exist on STEEM blockchain (penalty for early withdrawal). Even the 13 week Power Down would not be a sufficient mechanism to impose on an early withdrawal.

However...

A company option to match salary investment in Steem Power can be provided by a trusted 3rd party or by the company itself.

Here is how it would work using an example of a company that is willing to match 5%:

• Employer offers matching Steem Power up to 5% of the employee's paycheck as an incentive to work at the company. This is a good deal since the employee can invest 5% of their paycheck each pay cycle into SP and the employer will match that 5%.
• When the employee chooses this option, the employer withholds the opted percentage from each paycheck and matches it (just like in a 401K). Those withholdings are spent on Steem Power and held by the employer or by the 3rd party retirement service.
• Then the SP is delegated back to the employee to use in their STEEM account. This gives the employer or the third party service the power to impose an early withdrawal penalty on the STEEM withheld in the event the employee wants to withdraw the funds early.
• The employer or 3rd party service can be multiple entities that utilize the multi-signature STEEM transaction feature to enable trust in the system. This prevents the employer or the 3rd party from just taking the STEEM for themselves.

The advantage to the employee is that they can get twice the SP and they can use it as if the SP were in their account to grow their investment. The employee will use the SP delegation however they want. The investment stays in the STEEM ecosystem (similar to how a 401K allows employees to invest within a group of investment options)

There could be a clause in the withholding contract that imposes a penalty or an extended time limit for cashing-out the funds after termination of employment. This de-incentivizes the employee from just taking the matched funds and just quitting.

How the Multi-signature Transaction will help the employee keep his/her funds safe?

Luckily @timcliff organized a successful bounty to create a guide for multi-signature transactions
https://steemit.com/steem/@timcliff/bounty-mission-success-multisignature-transaction-guide-complete

To put the concept of multi-signature transactions into simple explanation,

This would prevent any single authority from taking the funds. Think of the multi-signature transfer as a safe that has multiple locks. Trusted people will have a key to one lock on the safe but cannot open the safe without the other individuals. One of those people would be the employee. One of the trusted people would be the responsible party that ensures that penalties are imposed for early withdrawal.

Where do the penalty funds go if there is an early withdrawal? In a 401K, the funds are essentially burned in taxes. Our system doesn't have an internal tax. This is something that should go to a good cause to support STEEM community as if it were a tax.

What are your thoughts on this concept?

This is only an idea that any company can do. If you were running a company and wanted to compensate employees in STEEM, how would you want to do it?

Please remember to VOTE and ReSteem

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For a breakdown of how Steemit Rewards system works:

https://steemit.com/steemit/@socky/simple-steemit-rewards-breakdown-how-it-works-since-hf20

For a breakdown of Steemit Keys:

https://steemit.com/life/@socky/do-you-understand-your-steemit-keys

For a breakdown of why Steem Power is Important:

https://steemit.com/steemit/@socky/why-is-steem-power-important-beginners-read

How to improve STEEM payment system:

https://steemit.com/steemit/@socky/introducing-the-hand-shake-and-how-it-can-revolutionize-steem-blockchain