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CEBS - GBA 1 Module 1 /Questions With Complete Solutions Rated (A+)
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CEBS - GBA 1 Module 1 /Questions With CompleteSolutions Rated (A+)
Quiz :1.1 Distinguish between the broad view and the narrow view of
employee benefits - Answer :The broad view defines employee benefits as
anything other than direct compensation, including both government-
mandated benefits and private plans. (social security, pension plans etc.). The
narrow view holds that employee benefits are any benefit sponsored
unilaterally or jointly by employers and employees that is not subsidized by the
government.
Quiz :1.2 List the categories of benefits that generally are considered to fall
under a broad view employee benefits - Answer :• Legally required benefits
(Social Security)
• Payment for time not worked (rest, lunch, vacation, and holidays)
• Medical
• Retirement & savings plan payments
• Miscellaneous benefits (employee discounts, severance pay, education, and
child care)
Quiz :1.3 What benefits are typically excluded when the term "employee
benefits" is viewed and defined in a narrow sense? - Answer :Those that are
legally mandated (Social Security and workers' compensation)
Quiz :2.1 Explain the types of businesses- or human resource-related reasons
for firms establishing employee benefit plans - Answer :So businesses may
attract & retain capable employees. Good benefit plans foster corporate
efficiency, productivity, and improve employee morale.
Quiz :2.2 What impact have labor unions historically had in employee
benefits? - Answer :Through the practice of collective bargaining labor unions
have had an impact on the growth of employee benefit plans. In 1948 the
NLRB ruled in the Inland Steel case that the duty to bargain in good faith over
wages also included insurance and fringes such as pension benefits. Following
that, in the W.W. Cross & Co. case, the NLRB ruled that wages included health
and accident plan.
Quiz :2.3 Explain the significance of the Taft-Hartley Act in employee benefit
planning. - Answer :The Labor-Management Relations Act, also called the Taft-
Hartley Act, sets forth the framework for good-faith collective bargaining over
, wages, hours, conditions and terms of employment and employee benefits. It
established the distinction between retirement benefits and welfare benefits.
It also provides framework for administration of those benefits. It's the legal
basis on which jointly trusteed benefit plans are founded.
Quiz :2.4 Summarize three major federal tax advantages associated with
employee benefit plans. - Answer :• Most contributions are deductible as long
as they are reasonable business expenses
• Within limits, the contributions are not considered income to employees
• In certain retirement/capital plans, benefits accumulate tax-free until
dispersed
Quiz :2.5 Why is the employee benefit mechanism an effective and efficient
way of providing insurance coverage? - Answer :It is convenient for employees
as they do not have to search for individual coverage and it is generally less
expensive. Providers state it is easier to communicate employee benefits
through an employer.
Quiz :3.1 What is the starting point in the design of any employee benefit
plan? - Answer :Any employee benefit plan should start with setting overall
objectives from the standpoints of both the employer and the employees.
Quiz :3.2 List the types of overall questions that should be addressed in setting
benefit objectives. - Answer :• What benefits should be provided?
o Benefits provide under both government programs and for the individual
employees should be considered
• Who should be covered by the benefit plan?
o Besides full-time employees, part-time, retirees, dependents of employees,
and survivors of deceased employees. All of which must adhere to all
governmental regulations.
• Should employees have benefit options?
o Due to changing workforce this question has assumed great prominence.
With the growth of flexible or cafeteria plans, employee choice is inevitable.
• How should the benefit plan be financed?
o A few factors should be decided first before answering this question:
♣ Is employer financing all costs?
♣ Or is it a shared approach with employees? If so, what percentage?
• How should the benefit plan be administered?
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