Question 1

Every unemployed worker's benefits are "charged" against one or more companies;therefore the more money paid out on behalf of a firm,the higher is the unemployment insurance rate for that firm.

Accepted Answer

The statement is true. Each company's unemployment insurance rate is influenced by the number of former employees filing for and receiving benefits. The more successful a company is in avoiding layoffs, the less it will have to pay in taxes for the state unemployment insurance fund.

Question 2

Cash balance plans are portable when an employee leaves,but they do not vest any sooner than traditional pension plans.

Accepted Answer

Cash balance plans are indeed portable, meaning that employees can take their accumulated benefits with them when they leave a job. However, they do not vest any sooner than traditional pension plans, meaning that employees must typically work for a certain number of years (often five) before they are entitled to their full benefits.

Question 3

The theory underlying the cafeteria benefits approach is simple: Instead of all workers at a company getting the same benefits,each worker can pick and choose among alternative options cafeteria style.

Accepted Answer

This statement accurately describes the theory underlying cafeteria benefits.

Question 4

Regardless of whether a plan is a defined-benefit plan or defined-contribution plan,employees will not know what the purchasing power of their pension checks will be,because interest rates are variable.

Accepted Answer

The answer of Regardless of whether a plan is a...

Question 5

Which law offers full coverage for retirees,dependent survivors,and disabled persons insured by 40 quarters of payroll taxes on their past earnings or earnings of heads of households?

Accepted Answer

The Social Security Act offers full coverage for retirees, dependent survivors, and disabled persons who have paid 40 quarters of payroll taxes on their past earnings or the earnings of heads of households. This program provides a safety net for those who can no longer work or support themselves due to age, disability, or the death of a family member who was the primary earner.

Question 6

States have the option to use state unemployment compensation resources to make full wage replacement available to parents who leave employment after the birth or adoption of a child.

Accepted Answer

The answer of States have the option to use state...

Question 7

Which of the following should be considered by firms when determining their overall benefit plan?

Accepted Answer

All three factors should be considered when determining the overall benefit plan. The plan should be consistent with the long-term business plan to ensure its sustainability, meet the needs of employees to attract and retain top talent, and satisfy any legal requirements to avoid legal issues.

Question 8

The benefits of this act are based on a percentage of average weekly earnings and are available for up to 26 weeks.

Accepted Answer

The Federal Unemployment Tax Act (FUTA) is responsible for funding unemployment benefits. These benefits are indeed based on a percentage of the claimant's average weekly earnings and are typically available for up to 26 weeks, providing financial support to individuals who have lost their jobs.

Question 9

Generally,employees of nonagricultural,private-sector firms are entitled to benefits for work-related accidents and illnesses leading to temporary or permanent disabilities under:

Accepted Answer

Workers' compensation is a system that provides benefits to employees who are injured or become ill as a result of their work. This includes both temporary and permanent disabilities. Private-sector firms are required to provide workers' compensation benefits to their employees in the event of a work-related injury or illness. ERISA, the Social Security Act, and the Federal Unemployment Tax Act do not specifically address work-related injuries or illnesses leading to disabilities.

Question 10

Social security is a cost shifting program,not a pension program.

Accepted Answer

Social Security is primarily a pension program designed to provide retirement, disability, and survivor benefits, funded by payroll taxes. It is not primarily a cost-shifting program.

Question 11

The Age Discrimination in Employment Act has eliminated mandatory retirement at any age.

Accepted Answer

The Age Discrimination in Employment Act (ADEA) specifically prohibits employers from imposing mandatory retirement on their employees at any age.

Question 12

Social Security is a pay-as-you-go system.Payroll taxes earned by current workers are distributed to pay benefits for those who are already retired.

Accepted Answer

Social Security is funded by payroll taxes, which are paid by current workers and used to provide benefits to retired individuals. It is a pay-as-you-go system, meaning that benefits are not pre-funded or held in reserve, but rather paid out of the current year's payroll tax revenue.

Question 13

The doctrine of _____ holds that an individual must pay taxes on benefits with monetary value when he/she receives them.

Accepted Answer

The doctrine of constructive receipt holds that an individual must pay taxes on benefits with monetary value when he/she receives them, even if they choose not to actually access the benefits. This applies to things like bonuses, prizes, or vacation pay that an employee could have received but chose to defer.

Question 14

In determining the competitiveness of benefits,senior management tends to focus mainly on:

Accepted Answer

Senior management tends to focus mainly on the cost of benefits as they are responsible for the financial well-being of the organization. They need to ensure that the organization remains profitable while providing competitive benefits to attract and retain top talent.

Question 15

Which act extended the 1.45% Medicare payroll tax to all wages and self-employment income?

Accepted Answer

The Omnibus Budget Reconciliation Act extended the 1.45% Medicare payroll tax to all wages and self-employment income.

Question 16

National survey data now indicate that people are more attached and committed to organizations that offer family-friendly policies because they benefit personally from the policies.

Accepted Answer

The answer of National survey data now indicate that people...

Question 17

A recent MetLife survey showed that 73 percent of employees who were highly satisfied with their benefits are also satisfied with their ________?

Accepted Answer

The survey results show a correlation between high satisfaction with benefits and job satisfaction, as opposed to factors such as salaries, supervisors, or pensions.

Question 18

Which act covers private-sector employees over age 21 enrolled in noncontributory (100% employer-paid)retirement plans who have one year's service?

Accepted Answer

The Employee Retirement Income Security Act (ERISA) covers private-sector employees over age 21 enrolled in noncontributory (100% employer-paid) retirement plans who have one year's service. COBRA covers employees and their families who lose health insurance coverage due to certain events, such as termination of employment, while HIPAA provides for portability and nondiscrimination for health insurance coverage. ADA covers individuals with disabilities and prohibits discrimination against them in employment.

Question 19

The anti-discrimination rule holds that employers can obtain tax advantages only for those benefits that do not discriminate in favor of:

Accepted Answer

The anti-discrimination rule holds that employers can obtain tax advantages only for those benefits that do not discriminate in favor of highly compensated employees. Discriminating in favor of white males, stockholders, or younger employees is not covered under this rule.

Question 20

A growing number of companies are giving employees direct access to information about their direct compensation,but not indirect compensation.

Accepted Answer

Many companies are increasingly transparent about both direct compensation (such as salary and bonuses) and indirect compensation (such as health benefits, retirement plans, and other perks) to ensure employees have a comprehensive understanding of their total compensation package.

Quiz 12: Indirect Compensation: Employee Benefit Plans