Question 1

Which of the following laws permit employers to automatically enroll employees in a defined contribution plan?

Accepted Answer

A)  Consolidated Omnibus Reconciliation Act
B)  Employee Retirement Income Security Act
C)  Pension Protection Act
D)  Internal Revenue Code C

Question 2

Define three types of life insurance.

Accepted Answer

There are three kinds of life insurance: term life insurance,whole life insurance,and universal life insurance.Term life insurance,the most common type offered by companies,provides protection to employees' beneficiaries only during a limited period based on a specified number of years (e.g.,5 years)subject to a maximum age (e.g.,65 or 70).After that,the insurance automatically expires.Neither the employee nor beneficiary receives any benefit upon expiration.In order to continue coverage under a term life plan,an employee must renew the policy and make premium payments while younger than the maximum allowed age for coverage. Whole life insurance pays an amount to the designated beneficiaries,but unlike term policies,whole life plans do not terminate until payment is made to beneficiaries.As a result,whole life insurance policies are substantially more expensive than term life policies,making the whole life insurance approach an uncommon feature of employer-sponsored insurance programs.From the employee's or beneficiary's perspective,whole life insurance policies combine insurance protection with a savings (or cash accumulation plan)because a portion of the money paid to meet the policy's premium will be available in the future with a low fixed annual interest rate of usually no more than 2 or 3 percent. Universal life insurance provides protection to employees' beneficiaries based on the insurance feature of term life insurance and a more flexible savings or cash accumulation plan than found in whole life insurance plans.

Question 3

Which set of rules prohibit employers from discriminating in favor of highly compensated employees in contributions or benefits,availability of benefits,rights,or plan features?

Accepted Answer

A)  Equal Pay Act
B)  vesting rules
C)  nondiscrimination rules
D)  participation rules C

Question 4

A 401(k)plan is which of the following types of retirement benefits?

Accepted Answer

A)  defined contribution
B)  defined benefit
C)  qualified benefit
D)  nonqualified benefit

Question 5

Which of the following do qualified plans provide?

Accepted Answer

A)  matching contributions to defined contribution plans
B)  substantial tax breaks to employers and employees
C)  substantial tax breaks to employees
D)  matching contributions to defined benefit plans

Question 6

Which government action contributed to the use of welfare benefits?

Accepted Answer

A)  the passage of the National Labor Relations Act
B)  the passage of the Social Security Act
C)  wage freezes
D)  recovery from economic depression

Question 7

These represent a series of payments for the life of the participant and beneficiary.

Accepted Answer

A)  collateral payments
B)  periodic payments
C)  lump sum distributions
D)  annuities

Question 8

You broke your neck at work.The company called to inform you that they had to switch your benefits from the short-term disability account to the long-term disability account.Based on this decision,how long have you been off work?

Accepted Answer

A)  at least 3 to 6 months
B)  at least 1 to 2 months
C)  12 months
D)  18 months

Question 9

Which of the following is a commonly used employer-sponsored retirement plan design?

Accepted Answer

A)  defined contribution
B)  qualified contribution
C)  Roth IRA
D)  IRA

Question 10

In 2014,approximately what percentages of private-sector employees and government employees,respectively,had access to an EAP?

Accepted Answer

A)  24 percent, 94 percent
B)  39 percent, 54 percent
C)  54 percent, 74 percent
D)  74 percent, 39 percent

Question 11

The XYZ Company tries to influence employee food choices by stocking vending machines with l healthy food.They also offer programs to teach stress reduction techniques.Which kind of discretionary benefit program does this company sponsor?

Accepted Answer

A)  family assistance program
B)  employee assistance program
C)  wellness program
D)  employer assistance program

Question 12

The tax advantage afforded companies from offering particular discretionary benefits has strategic value for which of the following reasons?

Accepted Answer

A)  It translates into cost savings to companies.
B)  It may adversely undercut company profits.
C)  It helps companies retain talented employees.
D)  It may lead to a decrease in the number of benefits a company chooses to offer.

Question 13

Effective employee benefits communications programs can help reduce which of the following?

Accepted Answer

A)  an appreciation of benefits
B)  increased flexibility
C)  costs
D)  an entitlement mentality

Question 14

Which of the following could undermine competitive advantage?

Accepted Answer

A)  basing employee benefits awards based on performance
B)  offering flexible benefits plans
C)  offering employee benefits as an entitlement
D)  offering employee benefits following the completion of a lengthy probationary period

Question 15

Since the costs of benefits has risen so dramatically in recent years,the majority of the companies decided to finance discretionary benefits using which of the following methods?

Accepted Answer

A)  noncontributory financing
B)  contributory financing
C)  employee-financed benefits
D)  employer-financed benefits

Question 16

Distinguish between qualified and nonqualified retirement plans.

Accepted Answer

The answer of Distinguish between qualified and nonqualified retirement plans....

Question 17

Due to a recent merger with another major airline,ABC Airlines decided to lay off some of its employees.ABC Airlines offers training sessions to teach job search and interviewing techniques to those laid off employees.Which kind of service was provided by this airline?

Accepted Answer

A)  employee assistance program
B)  tuition reimbursement
C)  wellness program
D)  outplacement assistance

Question 18

Outplacement assistance programs are best suited for which condition?

Accepted Answer

A)  new plant openings
B)  mergers and acquisitions
C)  workforce increases
D)  global operations

Question 19

Which of the following is rationale to apply a probationary period prior to permitting participation in an employee benefits plan?

Accepted Answer

A)  Companies view such periods as an opportunity to ensure that they have made sound hiring decisions.
B)  Companies enable new employees to decide whether they wish to remain employed on a long-term basis before completing extensive paperwork.
C)  Companies attempt to reduce employee entitlement.
D)  Companies attempt to discourage long-term employment.

Question 20

IRS guidelines define ________ plans as "defined benefit plans that define benefits for each employee by reference to the amount of the employee's hypothetical account balance."

Accepted Answer

The answer of IRS guidelines define ________ plans as "defined...

Exam 9: Discretionary Benefits