The Z share is a form of mutual fund share that is of a class that may be acquired by persons who are in the employ of the institution that manages the mutual fund. Z shares may be provided to employees as part of the overall benefits of employment, or simply offered for purchase. There are a couple of reasons why Z shares can be advantageous for both the institution and the employee.
One of the obvious reasons why Z shares are helpful for the employee is that the shares allow the employee to build an investment portfolio within the perimeters of his or her circumstances. Z shares, when issued as a benefit of employment, can function as an effective way to help the employee prepare for retirement. The institution may choose to issue Z shares to the employee, based upon the amount of annual gross income, a merit system, or a combination of the two. In other instances, the institution may offer to match the Z shares purchased by the employee, up to a certain amount, each calendar year. For example, an employee may be able to purchase up to a thousand Z shares per year, with the employer supplying an additional thousand shares to the employee’s account.
From the perspective of the employer, Z shares are a great incentive to keep valuable employees around long term. When used as part of the basis for a retirement program, or as a means of helping the employee to cultivate additional financial security, Z shares help to establish strong ties between employee and employer. An employee who feels fairly compensated by an employer is likely to remain a part of the organization and be productive.
The advantage of providing Z shares to an employee can even go a little further. When the employee believes that he or she is not only fairly compensated but is perceived as being valued by the employer, there is additional incentive to remain with the company and continue to accrue the benefits of the business relationship. Businesses that hold on to employees over the long term benefit from the accumulated wealth of experience, spend less resources in training and education of new employees, and tend to be perceived as being stable by the wider business and consumer community.
