Question 1

What is NOT a common reason why employees take early retirement?
A) health
B) personal finances
C) job satisfaction
D) executive perquisites

Accepted Answer

Executive perquisites (such as stock options or golden parachutes) are not a common reason why employees take early retirement. Most employees retire early due to health concerns or financial reasons, and some may also leave due to a lack of job satisfaction.

Question 2

A key issue in the 2009 Toronto municipal workers' strike related to the use of banked sick days. How is the accumulation of sick days generally regarded in the literature?
A) as part of an incentive plan
B) as pay for time not worked
C) as a mandatory benefit
D) as a form of pension

Accepted Answer

The accumulation of sick days is generally regarded in the literature as pay for time not worked. Banked or accumulated sick days can be seen as a form of deferred compensation, which employees have earned through their work and are entitled to use when they are unable to work due to illness or injury. However, some argue that banked sick days can create financial liability for an organization in the long run, and may be better replaced with other forms of compensation or benefits.

Question 3

Most pension plans are now viewed as providing deferred income that employees accumulate during their working life and that belongs to them after a specified number of years of service. What view is this based on?
A) provincial law
B) a pay-as-you-go philosophy
C) a reward philosophy
D) an earnings philosophy

Accepted Answer

This view is based on an earnings philosophy, where employees earn and accumulate pension benefits over time through their employment and contributions to the pension plan.

Question 4

Which type of pension plan with fixed payouts is falling out of use?
A) contributory plan
B) registered retirement savings plan (RRSP)
C) defined-benefit plan
D) defined-contribution plan

Accepted Answer

Defined-benefit plans are falling out of use, as they guarantee fixed payouts to retirees regardless of market performance, leading to high costs for employers. Employers are instead offering defined-contribution plans, in which employees contribute and the payouts are based on the performance of the investments.

Question 5

Tommy Lee remembers his grandfather telling him how working in the coal mines was a tough job and that if you left the employer before retirement age you did not get your pension. Which of the following applies to this type of pension?
A) It is a form of reverse discrimination.
B) It is based on a reward philosophy.
C) It is a defined-benefit plan.
D) It is based on an earnings philosophy.

Accepted Answer

The answer of Tommy Lee remembers his grandfather telling him...

Question 6

Bob Jones has just been permanently laid off from his present position. His company, ACME Manufacturing, has issued Bob a cheque that represents one month's pay for every year Bob worked at ACME. What does this cheque represent?
A) Bob's unused vacation pay
B) Bob's unused holiday pay
C) Bob's severance pay
D) Bob's unused sick leave

Accepted Answer

The cheque that ACME Manufacturing has issued Bob represents his severance pay, which is a compensation paid by the company to an employee who has been laid off or terminated from their job. The amount of severance pay is typically calculated based on the employee's length of service and their salary. In this case, Bob was paid one month's pay for every year that he worked at ACME.

Question 7

Which of the following is based on the theory that work-related accidents and illnesses should be considered a cost of doing business and that employees should not bear the costs of their treatment?
A) workers' compensation insurance
B) paid sick time
C) medical care benefits
D) unpaid leave

Accepted Answer

Workers' compensation insurance is based on the theory that work-related accidents and illnesses should be considered a cost of doing business, and it provides benefits to employees who are injured or become ill as a result of their work. The cost of the insurance is typically borne by the employer, rather than the employees, and it covers the costs of medical treatment, lost wages, and other expenses related to the injury or illness. Paid sick time and medical care benefits may also provide some coverage for work-related illnesses or injuries, but they are not explicitly designed to do so. Unpaid leave does not provide any benefits to employees who are injured or ill.

Question 8

Omar Morales, an older employee, is considering an early retirement package that his employer has offered; it includes improved benefits and cash bonuses. What is the term for this type of inducement?
A) silver handshake
B) golden parachute
C) platinum cushion
D) severance pay

Accepted Answer

A "silver handshake" is a term used to describe an early retirement incentive package offered to older employees, often including benefits and bonuses, to encourage them to retire early.

Question 9

In Canada, registered retirement savings plans (RRSPs)have grown significantly over the past few years. What is a key reason for this growth?
A) Minimum wage earners now have more disposable income and they are contributing.
B) The funds accumulate tax-free until they are withdrawn.
C) The rich-poor gap is narrowing, thus people have more money to invest.
D) RRSPs are a part of stock plans, which are growing.

Accepted Answer

The key reason for the growth of RRSPs in Canada is that the funds accumulate tax-free until they are withdrawn. This is a major incentive for Canadians to contribute to these retirement savings plans, as they can save on taxes and potentially earn higher returns on their investments. The other options presented (A, C, and D) do not accurately reflect the reasons for the growth of RRSPs.

Question 10

Which of the following is NOT a potential advantage of family-friendly benefits?
A) they help to attract valuable employees
B) they provide higher base pay, which helps with family budgets
C) they allow employees to manage their time better
D) they help to reduce workplace interruptions that affect productivity

Accepted Answer

Family-friendly benefits do not necessarily provide higher base pay. The other options are all potential advantages of such benefits.

Question 11

The growth in health care costs can be attributed to a number of factors. Which of the following is NOT one of those factors?
A) an aging population
B) costs associated with technological advances in medicine
C) overuse of costly health care services
D) the mandatory retirement age

Accepted Answer

The mandatory retirement age is not a factor contributing towards the growth in health care costs. The other three choices (A, B, and C) are all recognized factors that have been linked to the rise in health care costs.

Question 12

Which of the following is NOT an example of family-friendly benefits?
A) employer-provided childcare services
B) flexible work hours
C) subsidized dependant care
D) increased overtime requirements

Accepted Answer

Increased overtime requirements would not be considered a family-friendly benefit as it may result in employees having to work longer hours and have less time with their families. The other options provide support and assistance for employees with family responsibilities.

Question 13

What are holiday pay, sick leave, and vacation pay examples of?
A) payment for time not worked
B) benefits required by law
C) categories of health care benefits
D) unearned benefits

Accepted Answer

Holiday pay, sick leave, and vacation pay are all examples of payment for time not worked, as they are benefits provided to employees despite not actively working during that time.

Question 14

What does vesting guarantee?
A) withdrawal of benefits at any time
B) accrued pension benefits at retirement age
C) automatic funding of pension plans
D) selection of pension options

Accepted Answer

Vesting guarantees accrued pension benefits at the retirement age, meaning that the employee is entitled to receive a certain percentage of their pension plan benefits. It does not guarantee the withdrawal of benefits at any time, automatic funding of pension plans, or the selection of pension options.

Question 15

Bob Jindal works for RAY Vision Inc. The employer deducts money every month from Bob's paycheque for his pension plan. RAY Vision matches this amount for his pension. What type of plan is this?
A) a defined-benefit plan
B) a defined-contribution plan
C) a contributory plan
D) a noncontributory plan

Accepted Answer

A contributory plan is a pension plan in which both the employer and the employee contribute to the plan.

Question 16

Stella Vickram will receive a pension of $2,500 per month if she continues to work with ABC Media until she retires. She is now 45 years old. What type of plan is this?
A) a contributory plan
B) a noncontributory plan
C) a defined-contribution plan
D) a defined-benefit plan

Accepted Answer

This is a defined-benefit plan because Stella will receive a specific monthly pension amount upon retirement based on her years of service with ABC Media. The employer (ABC Media) bears the investment risk associated with this plan, as they are responsible for funding the plan to ensure that there are sufficient funds to pay out the promised benefits.

Question 17

James Callaghan has worked full-time for BC Metals for four years. He has learned from the HR manager that his earned pension benefits cannot be revoked by the employer. Why is this so?
A) because the employer expects him to work until retirement
B) because the benefits are vested
C) because the union would strike if they are revoked
D) because the benefits are defined

Accepted Answer

The earned pension benefits cannot be revoked by the employer because they have become vested. Vested benefits are guaranteed and cannot be taken away, even if the employee leaves the company. This is to ensure that employees have a secure source of retirement income.

Question 18

Polaroid allows employees the opportunity to try out retirement with a leave program, or gradually reduce their work hours as they approach retirement age. What is this an example of?
A) severance leave
B) a preretirement program
C) family-friendly benefits
D) CPP/QPP

Accepted Answer

This is an example of a preretirement program, which allows employees to transition into retirement gradually. Severance leave involves an employee receiving compensation upon leaving employment, family-friendly benefits are benefits that support employees with families, and CPP/QPP are government pension plans.

Question 19

From a pension perspective, what is a key issue concerning the aging of baby boomers in Canada?
A) There are more demands for dental benefits.
B) Baby boomers are leaving management, thus there is a loss to the HR managers who oversee this benefit.
C) There are fewer contributions to the pension fund by younger generations and more withdrawals for funding pensions for baby boomers, thus putting the fund at risk of depletion.
D) Younger generations are demanding reduced pensions for those leaving the workforce.

Accepted Answer

As baby boomers retire and start receiving their pensions, there is a significant increase in the number of pension fund withdrawals. At the same time, younger generations are contributing less to the pension fund due to various factors such as lower birth rates and longer life expectancies, which puts the pension fund at risk of depletion. This issue is compounded by the fact that many pension plans are underfunded to begin with, putting even more pressure on the system.

Question 20

Employer-sponsored employee assistance programs (EAPs)are created to help workers overcome hurdles in their personal lives. Which employee is the most likely to receive help under a typical EAP?
A) John Jones, who needs assistance to overcome a chemical dependency problem.
B) Steve Brown, who needs legal help in a personal bankruptcy proceeding.
C) Cindy Savage, who needs a list of qualified daycare facilities near the office.
D) Kate Johnson, who needs help choosing an appropriate M.B.A. program.

Accepted Answer

Employee assistance programs (EAPs) are typically designed to help employees with personal problems that may affect their work performance, such as substance abuse, mental health issues, and family or relationship problems. John Jones, who needs assistance with a chemical dependency problem, is the most likely to receive help under a typical EAP.

Quiz 11: Employee Benefits

What is NOT a common reason why employees take early retirement?

A key issue in the 2009 Toronto municipal workers' strike related to the use of banked sick days. How is the accumulation of sick days generally regarded in the literature?

Most pension plans are now viewed as providing deferred income that employees accumulate during their working life and that belongs to them after a specified number of years of service. What view is this based on?

Which type of pension plan with fixed payouts is falling out of use?

Tommy Lee remembers his grandfather telling him how working in the coal mines was a tough job and that if you left the employer before retirement age you did not get your pension. Which of the following applies to this type of pension?

Bob Jones has just been permanently laid off from his present position. His company, ACME Manufacturing, has issued Bob a cheque that represents one month's pay for every year Bob worked at ACME. What does this cheque represent?

Which of the following is based on the theory that work-related accidents and illnesses should be considered a cost of doing business and that employees should not bear the costs of their treatment?

Omar Morales, an older employee, is considering an early retirement package that his employer has offered; it includes improved benefits and cash bonuses. What is the term for this type of inducement?

In Canada, registered retirement savings plans (RRSPs) have grown significantly over the past few years. What is a key reason for this growth?

Which of the following is NOT a potential advantage of family-friendly benefits?

The growth in health care costs can be attributed to a number of factors. Which of the following is NOT one of those factors?

Which of the following is NOT an example of family-friendly benefits?

What are holiday pay, sick leave, and vacation pay examples of?

What does vesting guarantee?

Bob Jindal works for RAY Vision Inc. The employer deducts money every month from Bob's paycheque for his pension plan. RAY Vision matches this amount for his pension. What type of plan is this?

Stella Vickram will receive a pension of $2,500 per month if she continues to work with ABC Media until she retires. She is now 45 years old. What type of plan is this?

James Callaghan has worked full-time for BC Metals for four years. He has learned from the HR manager that his earned pension benefits cannot be revoked by the employer. Why is this so?

Polaroid allows employees the opportunity to try out retirement with a leave program, or gradually reduce their work hours as they approach retirement age. What is this an example of?

From a pension perspective, what is a key issue concerning the aging of baby boomers in Canada?

Employer-sponsored employee assistance programs (EAPs) are created to help workers overcome hurdles in their personal lives. Which employee is the most likely to receive help under a typical EAP?