Deck 8: Employee Benefits

Question 1

The Employee Retirement Income Security Act (ERISA) is also known as the ________ Act.

A) Walsh-Healey
B) Davis-Bacon
C) Retirement Equity
D) Pension Reform

Answer 1

Pension Reform

Question 2

Which of the following workers can claim benefits under the unemployment insurance system?

A) John was fired from his job because he was involved in a financial scam.
B) Mary lost her job because the employer shut down the plant in which she was working.
C) Ted was fired from his job because of his improper behavior with his co-workers.
D) Samantha resigned from her job because she found it boring.

Answer 2

B

Question 3

As per the Employee Retirement Income Security Act (ERISA), employers are required to count toward vesting all service from age ________ and to count toward earned benefits all earnings from age ________.

A) 18; 21
B) 21; 24
C) 24; 25
D) 25; 27

Answer 3

A

Question 4

Which of the following statements is TRUE of cash balance plans?

A) The benefit grows slowly and provides an unpredictable benefit.
B) The employer contributes a fixed percentage of workers' income to a hypothetical account and guarantees it will grow at a fixed rate.
C) The use of cash balance plans increases the employer's pension liability and employers therefore avoid these plans.
D) Under this plan, an employer provides health insurance to all the family members of the workers.

Question 5

A worker's compensation program comes into play when ________.

A) an employee requires treatment for alcohol or drug abuse
B) employees lose their jobs when a plant shuts down
C) an employee retires from a job paying an hourly wage
D) an employee is injured or ill on the job

Question 6

Which of the following benefits provided by an employer is most likely to motivate senior employees to remain with the organization in order to increase their retirement income?

A) severance pay
B) pension plans
C) health insurance
D) worker's compensation

Question 7

Under a(n) ________, the employer makes a specified dollar payment to an account in a managed fund, and the retirement benefit depends on the investment gains or losses by the fund.

A) tax-deferred 401(k) plan
B) defined benefit plan
C) employee stock ownership plan
D) defined contribution plan

Question 8

What is a pension?

A) compensation given to a worker who has been injured on the job
B) a payment given to employees in the form of company shares
C) a performance-based incentive given to workers on a monthly basis
D) a guaranteed monthly payment to a former employee during retirement

Question 9

Generally, in the case of vesting, nonforfeitable rights accrue based on the ________.

A) performance of the employee
B) employee's number of years of service
C) amount of basic salary of the employee
D) age of the employee

Question 10

A wage employment guarantee refers to a contract negotiation that assures employees ________.

A) a fixed amount of monthly payment during a union strike or a management lockout
B) a minimum amount of work or compensation during a specified amount of time
C) a fixed amount of monthly payment after their retirement
D) monitory assistance in the event of an accidental injury on the job

Question 11

The worker's compensation benefit is designed to ________.

A) provide supplemental income to retired workers
B) share company profits with the workers on a monthly basis
C) provide assistance to employees injured on the job
D) provide relocation compensation to newly hired workers

Question 12

A(n) ________ plan is a type of defined-benefit pension plan under which an employer credits a participant's account with a set percentage of his or her yearly compensation plus interest. The investment performance of the fund does not affect the final benefits to be received by the participant upon retirement.

A) employee stock ownership
B) cash balance
C) tax-deferred 401(k)
D) fixed contribution

Question 13

Which of the following statements is TRUE of a defined benefit plan?

A) In a defined benefit plan, the employer makes a specified dollar contribution to an account in a managed fund.
B) In a defined benefit plan, the amount of money contributed by an employer is twice the amount of money contributed by an employee.
C) Under a defined benefit plan, the amount of retirement benefit is fixed and the employee knows the amount.
D) Under a defined benefit plan, an employer distributes company shares to the employees instead of the retirement benefits.

Question 14

The conveying of employees’ nonforfeitable rights to share in a pension fund is termed ________.

A) conditioning
B) vesting
C) arbitrating
D) qualifying

Question 15

The Pension Benefit Guarantee Corporation (PBGC) was established within the Department of Labor to ________.

A) provide guaranteed pensions to union members during a union strike
B) conduct employee wellness programs in those companies that have labor unions
C) encourage voluntary employee pension continuance when changing employment
D) provide monetary compensation to a worker who has been injured on the job

Question 16

A qualified plan generally refers to a plan that meets standards set by the ________.

A) Office of the Comptroller of the Currency
B) Bureau of International Labor Affairs
C) Office of Banking and Securities
D) Internal Revenue Service

Question 17

In a contributory plan, ________.

A) the employer pays a portion of the funding and the Pension Benefit Guarantee Corporation</keyterm> pays the other portion
B) the employee pays a portion of the funding and the Pension Benefit Guarantee Corporation</keyterm> pays the other portion
C) the Pension Benefit Guarantee Corporation</keyterm> pays a portion of the funding and the Bureau of the Public Debt pays the other portion
D) the employer pays a portion of the funding and the employee pays the other portion

Question 18

Employers seek to qualify their pension plans under the IRS provisions because ________.

A) once a pension plan is qualified, the employees begin to pay taxes for the amount of money invested in the pension plan by them as well as the employer
B) once a pension plan is qualified, the Pension Benefit Guarantee Corporation begins contributing to the pension plan in place of the employer
C) by qualifying the pension plan, an employer can deduct pension contributions made to the qualified plan as business expenses for tax purposes
D) by qualifying the pension plan, an employer can prevent union members from receiving the benefits of the pension plan

Question 19

The Social Security system provides supplemental income to ________.

A) those who have never worked because of disabilities
B) those employees who earn less than $100 per week
C) unskilled laborers
D) retired workers

Question 20

Which of the following types of benefits is designed to protect employees and their families against permanent loss of income and high medical bills because of accidental injury or illness on the job?

A) pension
B) employee stock ownership plan
C) worker's compensation
D) unemployment insurance

Question 21

Call-in pay is ________.

A) the minimum payment guaranteed to employees who report for work even if work is not available
B) a supplemental payment given to employees asked to report to work before they were scheduled
C) the payment of overtime on top of another overtime rate that occurs if the same hours of work qualify for both daily and weekly overtime payment
D) the payment given to the workers for working under undesirable circumstances, such as weekend work

Question 22

Which of the following vacation plans provides an increase in the number of weeks of vacation according to length of service?

A) graduated plan
B) uniform plan
C) ratio-to-work plan
D) funded plan

Question 23

The ________ plan relates the length of vacation to the number of hours or days the employee works during a given time period, usually the year preceding the allocation of vacation.

A) funded
B) ratio-to-work
C) graduated
D) uniform

Question 24

To become eligible for retirement benefits in the Social Security system, individuals born after 1928 must contribute for 60 quarters (15 full years).

Question 25

A ________ Association is an organization for members who have an employment-related common bond, or coverage under one or more collective bargaining agreements, or membership in a labor union, to pay life, sick, accident, and similar benefits.

A) Negotiated Benefits Distribution
B) Voluntary Employees Beneficiary
C) Central Benefits
D) Rapid Employee Assistance

Question 26

A worker who has been discharged from work because of his or her misconduct can claim unemployment insurance benefits.

Question 27

The payment of overtime on overtime, which can occur if the same hours of work qualify for both daily and weekly overtime payment is known as ________.

A) shift differential
B) floating holiday
C) pyramiding
D) reporting pay

Question 28

To receive benefits, an unemployment insurance claimant must have worked for a certain period of time and must register with the state bureau of employment.

Question 29

The ________ vacation plan provides an increase in the number of weeks of vacation according to length of service.

A) uniform
B) ratio-to-work
C) funded
D) graduated

Question 30

The uniform vacation plan ________.

A) requires employers to contribute to a vacation fund from which employees may draw vacation pay during periods when no work is available
B) provides an increase in the number of weeks of vacation according to length of service
C) relates the length of vacation to the number of hours or days the employee works during a given time period
D) provides all workers with the same length of vacation

Question 31

Employee assistance programs are designed to provide ________.

A) monetary assistance to those employees who have been injured on the job
B) guaranteed monthly payments to retired employees
C) income to those employees who have been permanently terminated from the job through no fault of their own
D) assistance to employees in resolving personal problems, such as stress

Question 32

Which of the following statements is TRUE of a Health Savings Account (HSA)?

A) Both employees and employers make contributions to an HSA.
B) An employee can use the money saved in an HSA only in the event of an accident on the job.
C) The contributions made to an HSA are taxable.
D) An HSA cannot be transferred from one employer to the other.

Question 33

Which of the following laws provides for the continuation of medical and dental insurance for employees, spouses, and dependents in the event of termination of employment, death of the employee, divorce, legal separation, or reduction of hours, which results in the loss of group health plan eligibility?

A) Regulatory Flexibility Act
B) Economic Recovery Tax Act
C) Balanced Budget and Emergency Deficit Control Act
D) Consolidated Omnibus Budget Reconciliation Act

Question 34

Which of the following terms refers to wages that exceed the standard or regular pay rate and are given to employees for work performed under undesirable circumstances, such as overtime hours, weekend work, holiday work, or dangerous and hazardous circumstances?

A) severance pay
B) worker's compensation
C) guaranteed wages
D) premium pay

Question 35

A defined contribution plan is more common in labor contracts than a defined benefit plan.

Question 36

Which of the following employee benefits involves an employer contributing a fixed amount of tax-deferred money into an account for the employee to use for medical expenses?

A) supplemental unemployment benefits
B) wellness programs
C) health reimbursement arrangement
D) shift differentials

Question 37

Which of the following vacation plans provides all workers with the same length of vacation?

A) graduated plan
B) ratio-to-work plan
C) uniform plan
D) funded plan

Question 38

Under which of the following conditions does an employee become eligible for supplemental unemployment benefits?

A) After having worked for eight months in a company, Patrick lost his job due to his poor work performance.
B) John was fired from his job because he was involved in a financial fraud in his company.
C) Sally is a union member and is actively participating in a strike.
D) After having worked for three years in a company, Samantha lost her job because the employer decided to shut down the plant.

Question 39

Under a defined contribution plan, the amount of retirement benefit that would be received by an employee is fixed and the employee knows the amount.

Question 40

The graduated plan ________.

A) provides all workers with the same length of vacation
B) relates the length of vacation to the number of hours or days the employee works during a given time period
C) provides an increase in the number of weeks of vacation according to length of service
D) requires employers to contribute to a vacation fund from which employees may draw vacation pay during periods when no work is available

Question 41

Unlike a defined benefit plan, the cash balance plan is maintained on an individual account basis, much like a defined contribution plan.

Question 42

Management is required to provide continued health care coverage to striking employees and their families at the employees' expense.

Question 43

The employer contributions to a Voluntary Employees Beneficiary Association are taxable.

Question 44

The preferred provider organizations included in health insurance benefits provide specific services at a discount in exchange for a guaranteed number of patients.

Question 45

ERISA allows a pension plan to suspend pension payments of a retired member who reenters the job market.

Question 46

The health maintenance organizations included in health insurance benefits provide specific services at a discount in exchange for a monthly charge per family.

Question 47

If the benefits obtained from a Voluntary Employees Beneficiary Association are transferred to a family member then the family member has to pay the appropriate amount of income tax for the benefits.

Question 48

A Health Savings Account cannot be transferred from one employer to another.

Question 49

A graduated vacation plan provides an increase in the number of weeks of vacation according to length of service.

Question 50

The uniform vacation plan is most often found in the transportation industry.

Question 51

Employee stock ownership plans can complement, but not substitute, retirement benefit plans.

Question 52

In a contributory pension plan,the employer pays all the administrative and funding costs.

Question 53

Cash balance plans are usually more attractive to employees than the other traditional pension plans and typically increase their retirement benefits by 20 percent to 40 percent in comparison with their former plan.

Question 54

A Health Reimbursement account is a tax-exempt trust administered by a bank, insurance company, or other IRS-approved organization.

Question 55

Wage employment guarantee refers to a contract negotiation that assures employees a fixed amount of monthly payment after their retirement.

Question 56

The uniform vacation plan relates the length of vacation to the number of hours or days the employee works during a given time period.

Question 57

The funded plan requires employers to contribute to a vacation fund from which employees may draw vacation pay during periods when no work is available.

Question 58

Health insurance benefits are rarely included in any collective bargaining agreements.

Question 59

The tax-deferred 401(k) plan is designed to provide worker's compensation.

Question 60

The ratio-to-work plan is most often found in manufacturing firms.

Question 61

Call-in pay is the minimum payment guaranteed to employees who report for work even if work is not available.

Question 62

The guaranteed monthly income provided to a retired employee is known as the premium pay.

Question 63

According to the National Labor Relations Board (NLRB), child care is not a mandatory subject for collective bargaining.

Question 64

The pyramiding of overtime pay is prohibited in most contracts.

Question 65

A supplemental payment given to employees called back to work before they were scheduled is usually termed reporting pay.