Chapter 13 - MGT 461

Data from WellPoint Inc shows that _____ percent of its 29 million customers account for over 60 percent of its medical costs. 7 17 27 37

7

Which of the following is a hybrid of defined benefit and defined contribution plans? 401(k) plan Employee stock ownership plan Cash balance plan Profit-sharing plan

Cash balance plan

Maxford Corp. offers full vesting after two years. However, it does not offer portability of pension to its employees. Which of the following statements is true in this scenario? Employees of Maxford will receive 20 percent of their pension if they quit after one year. Maxford does not have to provide vested benefits to employees who quit before six months. Employees of Maxford who quit can have their pension benefits transferred to the new employer. Maxford does not have to provide vested benefits if employees quit of their own volition after two years.

Maxford does not have to provide vested benefits to employees who quit before six months.

Jim was a full-time student for four years, but he could not find a job after graduating. Jim is eligible to collect unemployment insurance.

false

An employee who changes jobs four or more times during his or her career will likely receive a pension approximately _____ as that of an employee whose working career is spent with one employer, assuming that both employees have the same starting salary and receive annual increases equal to inflation rate. twice as large the same size one-fourth the size half the size

half the size

The Pension Benefit Guarantee Corporation guarantees payment of vested benefits to employees formerly covered by terminated pension plans.

true

The Social Security Act has been designed and amended to provide a foundation of basic financial security for American workers and their families.

true

Vesting refers to the length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan.

true

Worker's compensation costs have been declining since 2005 due in part to employer safety programs.

true

Which of the following types of workers are generally NOT covered by workers' compensation? State government employees Private sector employees Railroad workers Farm workers

Farm workers

_____ is designed to lessen an employer's ability to deny coverage to an employee for a preexisting condition. COBRA OSHA HIPPA FMLA

HIPPA

Which of the following is NOT a benefit that is required by statutory law? Workers' compensation Social Security Pension and retirement benefits Unemployment compensation

Pension and retirement benefits

In a _____ plan, an employer agrees to provide a specific level of retirement pension, which is expressed as either a fixed dollar or a percentage-of-earnings amount that may vary (increase) with years of seniority in the company. defined benefit noncontributory benefit 401(k) shared benefit

defined benefit

In the majority of the states, unemployment insurance is financed exclusively by: joint contributions by employee unions. the philanthropy of co-workers. federal, state, and employee contributions. employers that pay federal and state unemployment insurance.

employers that pay federal and state unemployment insurance.

A 401(k) is an example of a defined benefit plan.

false

An eligible unemployed person may now collect unemployment insurance benefits for 36 weeks in most states.

false

Employees are the sole contributors to their cash balance plans.

false

Under the Economic Growth and Tax Reconciliation Act of 2001, employers have three hundred vesting schedule options.

false

Employers who have frequent layoffs pay higher tax rates than those with few layoffs.

true

Most employers prefer defined contribution pension plans to defined benefit plans.

true

What is the first question that should be asked when determining the amount of retirement income an employer should provide? Should Social Security payments be factored in when considering the level of income an employee should have during retirement? How should seniority be factored into the payout formula? What level of retirement compensation would the employer like to set as a target, expressed in relation to pre-retirement earnings? Should other postretirement income sources be integrated with the pension payment?

What level of retirement compensation would the employer like to set as a target, expressed in relation to pre-retirement earnings?

For an employee to gain lifetime coverage under Social Security, they must have worked for _____ quarters during which they were covered by the Act. 20 30 40 10

40

Today, _____ percent of the workers participate in the pension plan coverage provided by their employers. 98 12 28 53

53

Which of the following is a feature of defined contribution plans? They are faster to vest than defined benefit plans. They are characterized by high contribution rates. They are less portable than defined benefit plans. They are fully funded by employers.

They are faster to vest than defined benefit plans.

Experts attribute the decline in dollar cost of workers' compensation after 2005 relates to: increased variable component of base wage. devaluation of the dollar. employer safety programs. relaxed federal regulations.

employer safety programs.

The rising costs of Social Security have been covered by: increases in the maximum earnings base and the rate at which that base is taxed. reduction in Social Security benefits by providing market-driven options. progressive reduction in the coverage. welfare grants and annual supplements from Congress.

increases in the maximum earnings base and the rate at which that base is taxed.

A _____ plan is a hybrid health plan combining the benefits of HMO and _____. point-of-service; preferred provider organization POS; Blue Cross managed care; POS consolidated health; PPO

point-of-service; preferred provider organization

A McKinsey survey of CEOs found nearly 90 percent believe benefits are very important for attracting and retaining employees.

true

An individual retirement account is a tax-favored retirement savings plan that individuals can establish themselves.

true

Jennifer is hurt at work while driving a forklift. Her employer claims that she was injured as a result of her careless driving, and therefore she is not eligible for workers' compensation. What will be the outcome of the employer's challenge to her worker's compensation claim? She will likely receive workers' compensation benefits. She will get nothing. Jennifer and her employer will share the blame and split the costs. The employer has the final word in determining Jennifer's eligibility.

She will likely receive workers' compensation benefits.