Compensation Administration - Chapter 13 Questions

________ are defined benefit plans that look like a defined contribution plan. A) Cash balance plans B) Profit-sharing plans C) Employee stock ownership plans D) Qualified deferred compensation plans

A) Cash balance plans

Which of the following is a benefit under Social Security? A) Lump-sum death payments B) Job security C) Work/life balance D) Overtime pay

A) Lump-sum death payments

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

A) She will likely receive workers' compensation benefits.

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

A) They are faster to vest than defined benefit plans.

An employer experiencing high turnover and seeking to reduce pension costs is likely to prefer: A) full vesting after three years. B) full vesting after six years. C) full vesting after seven years. D) partial vesting after two years.

A) full vesting after three years.

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

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

A health maintenance organization pulls together a group of providers willing to provide services at an agreed upon rate in exchange for employers: A) limiting employees to these providers for health services. B) paying 30 percent of employee salary to the health maintenance organization. C) laying off all contingent workers who are not eligible for insurance. D) providing free child care assistance to employees.

A) limiting employees to these providers for health services.

A ________ plan is a hybrid health plan combining the benefits of a health maintenance organization and a ________. A) point-of-service; preferred provider organization B) managed care; preferred provider organization C) managed care; point of service D) consolidated health; preferred provider organization

A) point-of-service; preferred provider organization

Roughly ________ of all employees have access to paid life insurance. A) three-fourths B) half C) one-third D) a quarter

A) three-fourths

The majority of defined benefit plans calculate average earnings over the last ________ years of service for a prospective retiree. A) 2 to 4 B) 3 to 5 C) 6 to 8 D) 7 to 9

B) 3 to 5

Jacob, an 18-year-old, has been working at HoldVille Corp. for over a year. If HoldVille offers full vesting after one year, which of the following statements is true? A) Jacob is eligible for full pension as he has worked for over a year at HoldVille. B) Jacob is not eligible for pension as he is not over 21. C) Jacob is eligible for 20 percent of his pension if he has dependents. D) Jacob is not eligible for a pension if he quits of his own volition.

B) Jacob is not eligible for pension as he is not over 21.

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? A) Employees of Maxford will receive 20 percent of their pension if they quit after one year. B) Maxford does not have to provide vested benefits to employees who quit before six months. C) Employees of Maxford who quit can have their pension benefits transferred to the new employer. D) Maxford does not have to provide vested benefits if employees quit of their own volition after two years.

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

________ relieve an employer's liability when a preemployment injury combines with a work-related injury to produce a disability greater than that caused by the latter alone. A) Collateral funds B) Second-injury funds C) Insolvency funds D) Preemployment funds

B) Second-injury funds

Which of the following benefits is a federally administered program? A) Workers' compensation B) Social Security C) Job security D) Occupational Safety and Health Act

B) Social Security

Almost ________ percent of the companies offering child care assistance to employees also offer elder care assistance. A) 10 B) 30 C) 50 D) 90

C) 50

The ________ was enacted by the Congress to provide current and former employees and their spouses and dependents with a temporary extension of group health insurance when coverage is lost due to qualifying events. A) Health Insurance Portability and Accountability Act B) Social Security Act C) Consolidated Omnibus Budget Reconciliation Act D) Family and Medical Leave Act

C) Consolidated Omnibus Budget Reconciliation Act

Michael was laid off by his company owing to budget cuts. Before being laid off, he earned $1,000 per week. If he has been receiving unemployment insurance benefits for 26 weeks, which of the following statements is true in this scenario? A) Michael can continue to avail unemployment benefits for another 26 weeks. B) Michael is eligible for $1,000 per week if he can show that he has been earnestly searching for jobs. C) Michael is no longer eligible for unemployment benefits. D) Michael will now only be eligible for 20 percent of his previous income as unemployment benefits.

C) Michael is no longer eligible for unemployment benefits.

In the context of the Consolidated Omnibus Budget Reconciliation Act, which of the following statements is true? A) The biggest concern for individuals getting health insurance under the Consolidated Omnibus Budget Reconciliation Act is the relatively brief qualifying period. B) The Consolidated Omnibus Budget Reconciliation Act is designed to lessen an employer's ability to deny coverage for a preexisting condition. C) The Consolidated Omnibus Budget Reconciliation Act was enacted when stringent new privacy provisions added considerable compliance problems for HR people charged with enforcement. D) Employers having 50 or more employees are covered under the Consolidated Omnibus Budget Reconciliation Act, which entitles all eligible employees to receive unpaid leave up to 12 weeks per year for specified medical reasons.

C) The Consolidated Omnibus Budget Reconciliation Act was enacted when stringent new privacy provisions added considerable compliance problems for HR people charged with enforcement.

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

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

Experts attribute the stabilization in the dollar cost of workers' compensation since 2010 to: A) the increased variable component of base wage. B) the devaluation of the dollar. C) employer safety programs. D) relaxed federal regulations.

C) employer safety programs.

Steve has a small company with 12 employees. One of his employees, Larry, has been laid off because his work has been outsourced. Larry had health coverage through Steve's company and wants to continue that coverage. According to the Consolidated Omnibus Budget Reconciliation Act, how long can Larry continue his coverage through Steve's company after being laid off? A) 36 months B) 24 months C) 18 months D) 0 months

D) 0 months

Today, ________ percent of workers participate in the pension plan coverage provided by their employers. A) 98 B) 12 C) 28 D) 53

D) 53

Which of the following is an objective of the unemployment insurance program? A) To cover injuries and diseases that arise out of the course of employment B) To offset lost income during voluntary unemployment C) To help employed workers plan for retirement D) To provide an incentive for employers to stabilize employment

D) To provide an incentive for employers to stabilize employment

Contingent workers receive ________ benefits than regular workers; contingent workers' benefits cost ________ for employers than it does for regular workers. A) more; less B) fewer; more C) more; more D) fewer; less

D) fewer; less

An employee who changes jobs four or more times during his or her career will likely receive a pension that is 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. A) twice as large B) the same size C) one-fourth the size D) half the size

D) half the size