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Pension Plans

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Submitted By missamarie2
Words 981
Pages 4
Memorandum
TO: CEO
From: Controller
Date: June 29, 2010
Sub: Acquisition & Pension Plans

Acquisition Analysis & Benefits from Acquisition
The 100% acquisition of other business by the manufacturing company will be beneficial. It is because; full acquisition of the other business will bring two new segments for the manufacturing company that will pose a higher growth rate. It will also facilitate two new pension plans that will be beneficial to motivate the employees. But at the same time, the two segments and pension plans are entirely new for the business that may affect its profitability and effectiveness. The 100% acquisition by the manufacturing company will facilitate opportunity of the business expansion by intensifying its existing business activities. The manufacturing business would be able to capture new market and business areas by eliminating the need of setting up the business in new areas. It would also be helpful to establish a competitive advantage for the business that would cause an increase in its competitive position. The acquisition would increase the efficiency in resource utilization that would reduce competition in the industry. The business expansion would cause an increase in market share of manufacturing company that would increase awareness about the product and services of it. Thus, acquisition will be beneficial for manufacturing company.

Pension Plans
The 100% acquisition of other company by the manufacturing company will also bring two new pension plans that will be effective to increase the employees' motivation. The different pension plans required different reporting.

Defined Contribution Plan:
Defined contribution plan can be defined as the pension plan in which a certain percentage of money is contributed by the employer each year. It is the defined annual contribution by the company for the retirement of

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