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I'm the director of a small non-profit, and we're about to set up our first-ever retirement plan for our handful of employees. It will be a 403(b), the nonprofit version of a 401(k). We will probably work with TIAA-CREF, since several of our staff already have accounts there, either pensions from previous jobs or IRAs.

My dilemma is this: I want to ensure the maximum benefit for employees (and I'm one of them), but I have to "sell" this to my Board, who are very nervous about being committed to an expenditure that they've avoided until now.

So, do I recommend a set amount paid by the organizatin to each employee per year - either a flat sum, or a percentage of salary? Or, do I recommend that the Board match employee contributions - up to a certain dollar amount, or a percentage of salary? or some combination of the two? And what percentages are commonly used?

I have little personal experience with this kind of account to draw on. What is commonly done, and what are the advantages/disadvantages to employee and to the organization?

Thanks for any help you can give. I'm new to this Board, but not to the Fool.


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