Investing in their “Future”

Under the retirement system put in place in PaySoft (which mirrors some of the better retirement plans offered by industry today), students elect a percentage of their retirement they wish to invest into a retirement account.  Once a student reaches a certain percentage of investment (as set by you on both the Control Panel and Payroll Settings pages dependent on the pay period), a corporate percentage match {representing the company’s investment to the employee’s retirement fund) kicks in.  This means that if the student is required, by your guidelines, to invest 6% of their earnings (either pre or post-tax) into their retirement account and reaches that investment minimum, they will receive an additional contribution to their retirement account of whatever percentage you determine.  In the case of my current employer, a 6% investment gets you a 7% match, meaning that for having the foresight to invest at least 6% in your future, you receive 13% of your pay in your retirement account.

These contributions are nearly always put into funds consisting of a basket of stocks that the employer has determined to be safe bets for their employees’ retirement funds.  Some companies may make these retirement funds consist entirely of their own stock through an ESOP program, but these are more often than not the exception rather than the rule.

Stocks in your stock market

Due to the fact that you do not actually represent a corporation and are likely not going to be extremely versed in stock options, the Classonomics PaySoft system has been watered down to get the basic premise of retirement investing down while incorporating enough controls and standards to give anyone a good “foot in the door” outlook on future investing options.  Therefore, the stocks offered in PaySoft are the 30 stocks that are currently used by the Dow Jones Industrial Average.  Those thirty stocks, seen above, appear exactly like this on the Stock Exchange page, with columns for their current price, last price, and percentage change over the time period between when you last inputted those values.

NOTE: Initially the Stock Exchange was set up so that you would only have to click the update stock quote function under add-ons, but I ran into a few issues; the first being that this feature required a constant Internet connection, which could have proven problematic for some users.  Secondly, failure to have a constant Internet connection for this feature lead to PaySoft having broken values and causing the entire system to stop working, requiring a PaySoft restart to restore functionality.  Therefore, the automatic update feature was removed with all columns left in place so that you could hire a student to, at intervals determined by you, input the current stock prices that you could either get from the Classonomics website, that day’s newspaper, or any other source of your choosing.  This permits for the most accurate valuations of student stock portfolios throughout the year.

Let’s take a moment to go through each function of the Stock Exchange | Retirement system.

Managed Funds and Associated Fees

Some students will want to invest in their retirement, but they will not want to do the legwork to determine which of the 30 optional stocks are in their best interest over the course of the school year.  As such, they would prefer to let you handle their investments for them.  The thing is, you may or may not pay much attention to which stocks would best comprise a managed fund, merely assigning three of the thirty optional stocks randomly into any one of the three managed funds available.  This intimates life.  Who really knows whether you have found an investment guru or someone who is lacking in investment knowledge?  These are the perils of real life.

Fortunately, as these 30 stocks are the only ones available in Classonomics, all of them are fairly safe investments which should not lose your students money over the long term—even though a ten month period, as evidenced by the recent, but not normal, economic downturn could a negative return on principal investment.

Stock Elections

In any case, you have three different managed funds which you will assign three individual stocks to to comprise the overall fund.  These stocks will make up the student’s total investment portfolio until the next fiscal quarter, which will be the first chance they have to make a change.

Above you see one of the managed fund panes, including the stock you have chosen and the percent amount that stock accounts for this particular fund.  While some funds choose to keep their diversification balanced (as an example to the left), some choose to wildly skew in favor of one stock over the other.  You have complete control over which stocks to assign to each fund and how much each individual stock will account for the overall value of each individual fund.  Underneath the assigned percentages you are given a brief summary of that fund’s performance over the time period by the last time stock values were inputted into the “Current Price”, “Last Price” columns of the Stock Tracker.

At the bottom of the Stock Exchange screen you will find the Managed Fund Quarterly Fees pane.  Here is where you assign what percentage of the student’s overall portfolio value for each fiscal quarter you will take for managing their investment options for them.  This percentage is deducted from the student’s overall quarterly performance before being added to the student’s total portfolio value.

Contribution Rates

Here is where you set the particular rates to coincide with student elections for both savings direct deposits and retirement funding.  Based on the settings you have put into place on the Control Panel or Payroll Settings pages, the Co. Match column will automatically adjust to reflect whether the student has met the minimum investment percentage required to receive the corporate match.

Fiscal Quarter Stock Portfolios

Each school year is broken down into four fiscal quarters.  Each fiscal quarter has its own button on the Stock Exchange screen, enabling you to change student elections each quarter to match the students changing investment needs.  If a student chooses to invest their earnings in one of the managed funds, then select the fund of their choice in the “Managed Fund Selection” column and PaySoft will automatically fill in the stocks and investment rates to coincide with your settings from the Stock Exchange main page.

If students choose to opt for their own stock elections instead of the ones offered in a managed fund, they must submit an election change slip to indicate what their contributions rates will be and what stocks they want to have in their portfolio.  To select individual stocks, click on the right column under the stock selection header to select the selected stock from the drop down menu and then slide to the right and assign the opted percentage for that particular stock.  The stock selection slips may be too small for students to include the stocks symbol and respective percent they wish to have for that stock, therefore feel free to have them fill out the stock | percentage amount on the back of the election change slip if you wish.

Once all stock selections have been made, and respective percentages have been assigned to each stock, the columns to the far right of the quarterly portfolio screen will fill out to indicate whether or not total student investment equals 100% (any investment percentages less than 100% will equate to money that will be lost as it is neither credited into the paycheck or credited to the retirement portfolio value), will indicate how that student’s fund or basket of stock choices is performing (once bi-weekly stock prices have begun being inputted), how much in management fees have been paid (if any), and what the overall quarterly fund value for the student’s elections equals.  Once you have entered student stock elections and their respective percentages, you are finished with any required inputs on this page .

The quarterly stock portfolio buttons pages for the first, second, third, and fourth quarter are all the exact same.  Therefore any further discussion on these pages, or questions that you have in regards to them, should be directed to the Classonomics message board.

It is strongly encouraged that you permit students to “retire” at the end of the school year if they have shown the work ethic, prudence and discipline necessary to achieve this exemplary status.  You have to be realistic and realize that these are not going to be problem students that achieve this.  These are going to be your well behaved, hard working students that reach this plateau.  Also, as in keeping with the theme of this program, you need to instill the importance and benefits of saving for retirement as well.  There is no better way to do this than to allow your students to “retire” as a result of their hard work and thrifty ways.

Bi-Weekly Stock Prices

Every two weeks, on the last Friday of each two-week pay period, you should enter the closing price for each of the thirty DJIA stocks into the Bi-Weekly Stock Prices page.  This is how PaySoft keeps track of how much money each individual student’s portfolio is gaining or losing as a measure of stock market performance.  Failure to enter these amounts every two weeks will cause significant errors in calculating stock portfolio values, casting into error all projections and estimates for student net worth, available assets, etc.  Therefore, if you are going to use the stock | retirement function in PaySoft, it will be important that you have these values entered every other Friday, even if you print the values out over the weekend and have a student enter the stock values on the following Monday.

Retirement Withdrawals and Portfolio Values

This page provides an overview of all student portfolio values.  It is also on this page where you will enter in any amounts withdrawn a student’s “retirement years,” or the fourth fiscal quarter.  NOTE: Students should only be permitted to withdraw from their retirement accounts during the last quarter of the school year (whether your district does four, six, or nine week terms) and they need to withdraw ALL funds over the five permitted withdrawals on this screen. This concludes the discussion of the Stock Exchange and retirement.  Any questions regarding this section not covered here should be referred to the Classonomics message board for further discussion.