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Are you are familiar with a 401K (retirement investment)? I have a concept for employers to reward employees in Steem Power.

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 retirement 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 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:

  • 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.

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

This is a wonderful idea. Make it into a separate post so that more people would see it.

How would employer ensure that SP raised during the investment period is returned to the employee when the time comes to retire? Delegations can be taken back. It would be nice if this SP really belonged to the employee at the time of the retirement.

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It would require trust to a certain extent. If a trusted 3rd party would take the responsibility, then they first need to establish trust. The 3rd party would need to be public and transparent to maintain trust. They would take a small fee from the employer to cover costs to run the service. Also the multi-signature transfer option would not require all participants but a majority. 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 a majority of other trusted individuals. One of those people would be the employee.

I see. This makes sense...

Posted using Partiko Android

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