Deck 15: Employee Benefits and Employment Agreements

Question 1

A profit-sharing plan is a type of

A) defined contribution plan.
B) defined benefit plan.
C) employee stock ownership plan.
D) employee welfare benefit plan.

Answer 1

A

Question 2

Employment at will is

A) any employment that is covered by a formal employment agreement.
B) employment for a specified time period.
C) employment for an agreed-upon compen- sation that can be terminated at any time by the employer or employee.
D) employment for a specified time period that is not restricted by a covenant not to compete.

Answer 2

C

Question 3

A retirement benefit plan that is integrated with the employer's contribution to Social Security on behalf of the participant is referred to as a(n)

A) integrated plan.
B) Social Security plan.
C) combination plan.
D) welfare benefit plan.

Answer 3

A

Question 4

A covenant not to compete will generally be enforceable if

A) no time period or geographical area is specified.
B) it is considered reasonable.
C) the agreement extends beyond 10 years after the employee's employment terminates.
D) the covenant makes it impossible for the employee to obtain gainful employment after his or her employment with the em- ployer terminates.

Question 5

Inventions and patents are always the property of the employer.

Question 6

A qualified plan that establishes individual accounts for each plan participant and provides benefits based solely on the amount contributed to the participants' accounts is referred to as a

A) defined benefit plan.
B) defined contribution plan.
C) welfare benefit plan.
D) employee stock ownership plan.

Question 7

Employee benefit plans that meet with certain requirements of the Internal Revenue Code and qualify for special tax treatment are referred to as qualified retirement plans.

Question 8

The federal act regulating pension plans, to protect qualified plan participants and their beneficiaries by governing the funding, vesting, administration, and termination of pension plans, is known as the

A) Qualified Plan Act.
B) Employee Retirement Income Security Act of 1974 (ERISA).
C) Tax Equity and Fiscal Responsibility Act of 1982.
D) Pension Protection Act of 1987.

Question 9

A favorable determination letter issued by the Internal Revenue Service states that the plan has been reviewed and that it complies with the requirements for a qualified plan.

Question 10

Qualified retirement plan sponsors can choose to be regulated under either the Internal Revenue Code or the Employee Retirement Income Security Act of 1974.

Question 11

A qualified plan can be made by an oral agreement.

Question 12

A qualified plan administrator is an individual or entity that adopts a qualified plan for the benefit of the administrator's employees or their beneficiaries.

Question 13

Qualified plan contributions may be made by the plan sponsor and/or the plan participant.

Question 14

Defined benefit plans establish an individual account for each participant.

Question 15

Qualified plans designed to give partial ownership of the corporation to the employees are referred to as

A) employee stock ownership plans.
B) corporate pension ownership plans.
C) profit-sharing plans.
D) stock dividend retirement plans.

Question 16

An employer would not enter into an employment agreement to

A) be assured of retaining the services of the employee for a specified period of time.
B) restrict the employee from bringing his or her knowledge to the competition, at least for a reasonable amount of time.
C) protect the employer's trade secrets and confidentiality.
D) use the employment agreement to compel an employee to continue employment against his or her will.

Question 17

An agreement, generally found within an employment agreement, that restricts the employee's future employment and actions that may possibly compete with the employer's business is referred to as a(n)

A) future employment clause.
B) restraint of trade clause.
C) employment-at-will agreement.
D) covenant not to compete.

Question 18

An employment agreement is best described as an agreement

A) entered into between an employer and employee to set forth the rights and obli- gations of each party with regard to the employee's employment.
B) entered into between an employer and employee to guarantee the rights of an employee.
C) that restricts the employee's future em- ployment and actions that may possibly compete with the employer's business.
D) entered into between an employer and employee to guarantee the rights of the employer with regard to the employee's performance.

Question 19

Contributions to defined contribution plans are based solely on the amount that will eventually be paid out to the participant, not on the income or profits of the corporation.

Question 20

A may be submitted to the Internal Revenue Service to request a favorable de- termination letter with regard to an employee benefit plan.

A) Form 5500
B) petition for approval
C) Form 5300 (Application for Determination for Employee Benefit Plan)
D) Form S-1 (IRS Determination Application)

Question 21

Parties to an employment agreement will often agree to submit any disputes over the agreement to binding arbitration for resolution.

Question 22

The employment agreement is considered to be a binding contract between the employee and the employer, and it must contain all of the elements of a valid contract.

Question 23

An employment agreement is usually assign- able by the employee.

Question 24

A restrictive covenant found in an employment agreement that restricts the divulgence of trade secrets loses its effect once the trade secret becomes common knowledge.

Question 25

Only the employer need sign the employment agreement for it to be valid.