Chapter 11 Employee Benefits

MULTIPLE CHOICE 1. For which key reason do employers need to communicate the extent and value of the benefits they provide? a It is required by the law. . b Employees generally underestimate the value of the benefits offered. . c It immediately reduces the overall costs. . d he !" department needs this information for its newsletters. .

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0. 1hich would NOT be considered a primary ob2ective of most benefits programs? a reducing turnover . b improving employee satisfaction . c retaining top3performing employees . d attracting and motivating employees .

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). Ideally5 which of the following should apply to an organi6ation7s benefits system? a It should mirror that of the competition5 so as to attract top applicants. . b It should be restricted to mandatory benefits. . c It should be aligned to the overall strategy of the organi6ation. . d It should be more than 84 percent of payroll costs5 so as to be competitive. .

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:. 1hat is the approximate cost of benefits as a percentage of total payroll cost in 9anadian organi6ations? a 0* percent . b 04;08 percent . c )4;)8 percent 9opyright < 041: $elson Education .td. 1131

9hapter 11 Employee 'enefits . d == percent .

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8. 1hich of the following do employers often use to obtain employee input regarding benefits packages? a performance appraisals . b opinion surveys . c union reports . d psychological tests .

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9hapter 11 Employee 'enefits =. %usie -ones has definite preferences in terms of the benefits offered by her employer. %usie will be able to select the benefits she values highly and avoid those she does not need or want if her employer offers which benefit format? a an employee selection plan . b a flexible benefits plan . c a benefit pool . d a modified benefits system .

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>. !ow has the diverse workforce impacted benefits programs? a by requiring benefit programs to consider family3friendly options . b by requiring lower out3of3pocket costs for employees . c by requiring greater pension contributions by employers . d by requiring benefits packages to cover part3time as well as full3time employees .

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*. 1hich statement best describes flexible benefit plans? a hey are offered to employees who then must purchase each benefit they select. . b hey are favoured by employers because they reduce administration costs. . c hey are offered as a bonus to executives. . d hey allow employees to choose benefits suited to their needs. .

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+. /anagement at #'9 Inc. wants to introduce a new benefit that is not required by law. 1hat should it do first? a develop an !"I% system to help with its administration . b establish that there is a need for it . c lobby the government to make it mandatory . 9opyright < 041: $elson Education .td. 113)

9hapter 11 Employee 'enefits d hire a consulting firm to roll it out .

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14. /any organi6ations use the services of professional benefits vendors to administer their benefits. 1hat is this practice a form of? a freelancing . b merger . c outsourcing . d employee empowerment .

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9hapter 11 Employee 'enefits 11. 1hich of the following is a fast5 convenient5 and interactive way employees can learn about or change their benefits? a a benefits information packet . b personal benefit profiles . c infrequent information stations . d employee self3service @E%%A systems .

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10. Breat (arcel Inc. has numerous office locations across 9anada5 including isolated areas with no access to the Internet. 1hat would be the most efficient way for the company to communicate a new benefit to all its employees? a online modules . b a meeting in a central location . c trips by the organi6ation7s top executive team to all the locations . d payroll inserts .

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1). # large portion of an organi6ation7s total payroll is devoted to employee benefits and this figure has risen over the past few decades. 1hich of the following has NOT contributed to this increasing cost? a additional benefits offered voluntarily by organi6ations . b legislation forcing employers to establish some benefits . c the use of online5 interactive benefits programs . d employers trying to match the competition .

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1:. 1hich of the following statements does NOT describe management concerns about benefits? a /anagement is concerned with union demands. . b /anagement is concerned with tax consequences. . c /anagement is concerned with the escalating cost of health care benefits. 9opyright < 041: $elson Education .td. 1138

9hapter 11 Employee 'enefits . d /anagement is concerned with promoting a shift in mindset from self3responsibility to . entitlement.

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18. 1hich of the following is NOT necessary for an organi6ation to consider when developing its benefits program? a the associated costs . b tax consequences . c benefits other employers offer . d the globali6ation of benefits .

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9hapter 11 Employee 'enefits 1=. .egally required employee benefits amount to about 10 percent of the benefits packages that 9anadian employers provide. 1hich benefit is not required? a employer contributions . b employment insurance . c workers7 compensation insurance . d retirement savings .

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1>. 1hich of the following is NOT a benefit provided under 9((CD((? a retirement pensions . b sick leave benefits . c survivors7 benefits . d disability benefits .

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he /eat %hop5 one of 9anada7s best employers according to a recent survey5 is considering ways to contain its rising benefits costs. 1hat is NOT a wise option for the /eat %hop? a making contribution changes5 such as deductibles . b putting dollar limits on some benefits . c instituting flexible benefits . d making cuts to mandatory benefits .

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1+. 1orkers7 compensation covers certain work3related examples of which of the following? a lawsuits . b misunderstandings . c pay inequities . d illnesses 9opyright < 041: $elson Education .td. 113>

9hapter 11 Employee 'enefits .

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04. 1hich statement does NOT describe workers7 compensation? a #ll employers pay the same premium rate to be eligible for workers7 compensation. . b Employers share collective liability5 though contributions may vary among employers in . the same industry. c 1orkers7 compensation is based on loss of earnings. . d he system is no3fault and nonadversarial5 and thus offers no recourse to the courts. .

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9hapter 11 Employee 'enefits 01. 1hich of the following is based on the theory that work3related accidents and illnesses should be considered a cost of doing business and that employees should not bear the costs of their treatment? a workers7 compensation insurance . b paid sick time . c medical care benefits . d unpaid leave .

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he growth in health care costs can be attributed to a number of factors. 1hich of the following is $, 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 .

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0). 1hat are holiday pay5 sick leave5 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 .

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0:. 'ob -ones has 2ust been permanently laid off from his present position. !is company5 #9/E /anufacturing5 has issued 'ob a cheque that represents one month7s pay for every year 'ob worked at #9/E. 1hat does this cheque represent? a 'ob7s unused vacation pay . b 'ob7s unused holiday pay . c 'ob7s severance pay 9opyright < 041: $elson Education .td. 113+

9hapter 11 Employee 'enefits . d 'ob7s unused sick leave .

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08. # key issue in the 044+ oronto municipal workers7 strike related to the use of banked sick days. !ow 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 .

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9hapter 11 Employee 'enefits 0=. ,mar /orales5 an older employee5 is considering an early retirement package that his employer has offeredE it includes improved benefits and cash bonuses. 1hat is the term for this type of inducement? a silver handshake . b golden parachute . c platinum cushion . d severance pay .

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0>. 1hat is NOT a common reason why employees take early retirement? a health . b personal finances . c 2ob satisfaction . d executive perquisites .

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0*. (olaroid allows employees the opportunity to try out retirement with a leave program5 or gradually reduce their work hours as they approach retirement age. 1hat is this an example of? a severance leave . b a preretirement program . c family3friendly benefits . d 9((CD(( .

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0+. /ost 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. 1hat view is this based on? a provincial law . b a pay3as3you3go philosophy . c a reward philosophy 9opyright < 041: $elson Education .td. 11311

9hapter 11 Employee 'enefits . d an earnings philosophy .

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)4. 'ob -indal works for "#F Gision Inc. he employer deducts money every month from 'ob7s paycheque for his pension plan. "#F Gision matches this amount for his pension. 1hat type of plan is this? a a defined3benefit plan . b a defined3contribution plan . c a contributory plan . d a noncontributory plan .

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ommy .ee remembers his grandfather telling him how working in the coal mines was a tough 2ob and that if you left the employer before retirement age you did not get your pension. 1hich 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 defined3benefit plan. . d It is based on an earnings philosophy. .

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)0. %tella Gickram will receive a pension of H05844 per month if she continues to work with #'9 /edia until she retires. %he is now :8 years old. 1hat type of plan is this? a a contributory plan . b a noncontributory plan . c a defined3contribution plan . d a defined3benefit plan .

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)). In 9anada5 registered retirement savings plans @""%(sA have grown significantly over the past few years. 1hat is a key reason for this growth? a /inimum wage earners now have more disposable income and they are contributing. . b he funds accumulate tax3free until they are withdrawn. . c he rich;poor gap is narrowing5 thus people have more money to invest. . d ""%(s are a part of stock plans5 which are growing. .

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):. 1hich type of pension plan with fixed payouts is falling out of use? a contributory plan . b registered retirement savings plan @""%(A . c defined3benefit plan . d defined3contribution plan .

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)8. -ames 9allaghan has worked full3time for '9 /etals for four years. !e has learned from the !" manager that his earned pension benefits cannot be revoked by the employer. 1hy 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 .

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9hapter 11 Employee 'enefits )=. From a pension perspective5 what is a key issue concerning the aging of baby boomers in 9anada? a here are more demands for dental benefits. . b 'aby boomers are leaving management5 thus there is a loss to the !" managers who . oversee this benefit. c here are fewer contributions to the pension fund by younger generations and more . withdrawals for funding pensions for baby boomers5 thus putting the fund at risk of depletion. d Founger generations are demanding reduced pensions for those leaving the workforce. .

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)>. 1hat 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 .

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)*. Employer3sponsored employee assistance programs @E#(sA are created to help workers overcome hurdles in their personal lives. 1hich employee is the most likely to receive help under a typical E#(? a -ohn -ones5 who needs assistance to overcome a chemical dependency problem. . b %teve 'rown5 who needs legal help in a personal bankruptcy proceeding. . c 9indy %avage5 who needs a list of qualified daycare facilities near the office. . d Iate -ohnson5 who needs help choosing an appropriate /.'.#. program. .

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)+. 1hich of the following is $, a potential advantage of family3friendly benefits? a they help to attract valuable employees . b they provide higher base pay5 which helps with family budgets . c they allow employees to manage their time better . d they help to reduce workplace interruptions that affect productivity 9opyright < 041: $elson Education .td. 1131:

9hapter 11 Employee 'enefits .

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:4. 1hich of the following is $, an example of family3friendly benefits? a employer3provided childcare services . b flexible work hours . c subsidi6ed dependant care . d increased overtime requirements .

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9hapter 11 Employee 'enefits :1. 1hich of the following is $, a benefit of family3friendly programs? a increasing the risk of unioni6ation . b reducing tardiness . c improving productivity . d reducing employee absenteeism .

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:0. 1hat do mildly ill childcare facilities provide? a tax benefits . b medical supervision . c a negative investment . d telecommuting facilities for working parents with ill children .

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:). !ow are childcare programs and eldercare programs similar? a Jnder both programs5 most of the caregivers are men. . b 'oth types of programs typically offer on3site care facilities. . c 'oth programs try to maintain or increase productivity by assisting employees with their . responsibilities outside the workplace. d 'oth programs offer substantial income tax benefits to employees. .

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he collective bargaining agreement between #9/E Inc. and the union 9J(# 144) .ocal requires the employer to provide a limited vision care package. 1orkers are demanding more. 1ho will determine any new package? a the union and the government . b the government . c the employer and the union . d the employer 9opyright < 041: $elson Education .td. 1131=

9hapter 11 Employee 'enefits .

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:8. 9anada has experienced a growth in the proportion of part3time workers @versus full3timeA over the past decade. 1hat is a key reason for this growth? a /any full3time 2obs are outsourced overseas. . b he government is forcing firms to hire on a part3time basis. . c Jnions prefer workers to have part3time 2obs. . d Employers tend to save on compensation costs as many part3time workers do not receive . voluntary benefits.

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9hapter 11 Employee 'enefits 1. 1hat considerations should an organi6ation make in implementing an effective benefits program? #$%& 'enefits are an established and integral part of the total compensation package. In order to have a sound benefits program5 there are certain basic considerations. It is essential that a program be based on specific ob2ectives that are compatible with the organi6ation7s philosophy and policies5 as well as affordable. hrough committees and surveys5 a benefits package can be developed to meet employees7 needs. hrough the use of flexible benefit plans5 employees are able to choose those benefits that are best suited to their individual needs. #n important factor in how employees view the program is the full communication of benefits information through meetings5 printed materials5 and annual personali6ed statements of benefits. ( %& 1 "EF& )+43)+0 ,'-& 1 './& !igher ,rder

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9hapter 11 Employee 'enefits 0. ?escribe some of the ways employers have been trying to contain health care benefit costs. #$%& he cost of health care programs has become the ma2or concern in the area of employee benefits. %everal approaches can be used to contain health care costs5 including reduction in coverage5 increased coordination of benefits5 and increased deductibles. Employee assistance programs @E#(sA and wellness programs can also help cut the costs of health care benefits. ( %& 1 "EF& )+=3)+*K:44 ,'-& 0K: './& "emember

). 9ompare and contrast the risks to the employee in regard to defined3contribution and defined3benefit pension plans. #$%& In a defined3benefit pension plan5 retiring employees are guaranteed a particular payment level @i.e.5 the retirement benefit is LdefinedMA. !owever5 in a defined3contribution pension plan5 the only guarantee to employees is that the employer will contribute a set dollar amount on their behalf to the pension plan @i.e.5 the contribution is LdefinedMA. 1hile the pension benefits under a defined3benefit plan are fixed5 the pension benefits of the defined3contribution plan vary according to the success of the plan7s investments @i.e.5 superior investment decisions will yield greater pension payments than mediocre or poor decisionsA. Jnder the defined3benefit plan5 retiree risk is largely limited to whether the fund is properly funded and whatever effects inflation will have on their fixed pension cheques. Jnder the defined3contribution plan5 retiree risk is associated with the general risks and rewards of investments5 the quality of investment advice5 and the risks commonly associated with the defined3benefit plans. ( %& 1 "EF& :4: ,'-& > './& !igher ,rder

:. Explain the concept of family3friendly benefits. $ame and discuss at least five of these benefits employers offer their employees. #$%& /any organi6ations are seeking to create a family3friendly organi6ational environment that allows employees to balance work and personal needs. here are a wide variety of family3friendly benefits that organi6ations may offer. o help workers cope with a wide variety of problems that interfere with the way they perform their 2obs5 organi6ations have developed employee assistance programs. hese programs provide diagnosis5 counselling5 and referral for advice or treatment when necessary for problems related to alcohol or drug abuse5 emotional difficulties5 and financial or family difficulties. Jsually the organi6ation coversNin part or totallyNcosts of tuition5 books5 and related fees. he increased employment of employees with dependent children andCor eldercare responsibilities has created an unprecedented demand for childcare and eldercare arrangements. In response5 many organi6ations provide financial assistance and on3site childcare centres and support for eldercare. In addition5 many organi6ations are implementing employee3accumulated leave days for dependant care and extended leave policies for child3 andCor eldercare. In addition5 organi6ations may also offer access to legal services5 financial planning5 housing and moving expenses5 transportation pooling5 credit unions5 recreational and social services5 and work3at3home arrangementsCtelecommuting to offer savings to employees and reduce stress. ( %& 1 "EF& :4=3:4+ ,'-& * './& "emember

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