Question 1

Which of the following statements about company cars is the most accurate?&#10;A) Company cars are less commonly provided in the UK than in most other countries&#10;B) The taxation of company cars makes them an attractive benefit&#10;C) Company cars tend to become more impressive as people are promoted&#10;D) The more miles that you drive in a company car the less tax you pay

Accepted Answer

Company cars are often part of an employee's benefits package, and it's common for the quality or value of the car to increase as an individual is promoted within a company. This serves as both a status symbol and a practical benefit, reflecting the employee's higher position and possibly greater travel needs.

Question 2

What level of pension would an employee receive if he/she was a member of a sixtieth final salary pension scheme, had forty years' pensionable service and was earning £30,000 a year at the date of retirement?

A) £15,000 per year
B) £20,000 per year
C) £25,000 per year
D) £30,000 per year

B

Accepted Answer

In a sixtieth final salary pension scheme, the pension is calculated as 1/60th of the final salary for each year of service. With 40 years of service, the pension would be 40/60 of the final salary, which is £30,000. Therefore, the pension would be £20,000 per year.

Question 3

Which of the following is not an explanation as to why many occupational pension funds moved from being in surplus to deficit over the past twenty years?&#10;A) Reduced regulation&#10;B) Stock market performance&#10;C) Higher taxation&#10;D) Increased life expectancy

Accepted Answer

Reduced regulation is not typically a reason for pension funds moving from surplus to deficit. Factors like stock market performance, higher taxation, and increased life expectancy are more directly related to financial pressures on pension funds.

Question 4

Which formula is typically used in public sector organisations to calculate entitlement to occupational sick pay?&#10;A) Six months full pay&#10;B) Six months half pay&#10;C) Three months full pay followed by three months half pay&#10;D) Six months full pay, followed by six months half pay

Accepted Answer

The typical formula used in public sector organizations for calculating entitlement to occupational sick pay is six months of full pay, followed by six months of half pay. This approach balances support for the employee with the need to manage public resources responsibly.

Question 5

What is being described here? An occupational pension scheme which pays a pension based on the number of years' service and the salary at the date of retirement.&#10;A) SERPS&#10;B) A defined benefit scheme&#10;C) A defined contribution scheme&#10;D) A hybrid scheme

Accepted Answer

A defined benefit scheme is described as an occupational pension scheme that pays a pension based on the number of years of service and the salary at the date of retirement. This type of scheme is also sometimes referred to as a final salary or career average scheme.

Question 6

What is being described here? A system which allows employees a degree of choice in how their total payment package is made up.&#10;A) A cafeteria system&#10;B) A pick and mix system&#10;C) A self-design system&#10;D) A pliable system

Accepted Answer

This system is commonly called a cafeteria system, where employees are given a range of options to choose from to make up their total payment package.

Deck 22: Pensions and Benefits