Chapter 13.1 Test

Despite passage of the Family and Medical Leave Act, the United States still offers significantly less unpaid leave than most Western European countries. A. True B. False

A

ERISA requires covered organizations to establish employee pension plans and to describe the plan's funding, eligibility requirements, and risks. A. True B. False

A

In 1929, benefits added up to an average of only three percent to every dollar of payroll. A. True B. False

A

In contrast to unemployment insurance benefits, workers' compensation disability benefits are tax-free. A. True B. False

A

In the event severe financial difficulties force a company to terminate or reduce employee pension and health-care benefits, the PBGC provides some protection, but not necessarily full replacement. A. True B. False

A

One of the reasons for giving more responsibility to employees for retirement planning and other benefit decisions is to increase their awareness and understanding of such benefits. A. True B. False

A

Social Security retirement benefits are no longer subject to an earnings test once retirement age is reached. A. True B. False

A

The two types of disability insurance are short-term disability plans and long-term disability plans. A. True B. False

A

The vesting of employer-funded pension benefits must take place under one of two schedules: five-year, 100%, or three- to seven-year period, with at least 20% vesting in the third year and each year thereafter. A. True B. False

A

There is no legal obligation for employers to offer private retirement plans, but most do. A. True B. False

A

Defined contribution retirement plans insulate employees from investment risks, which are instead borne by the company. A. True B. False

B

Federal, state, and local government employees are covered by the Old Age, Survivors, Disability, and Health Insurance (OASDHI) program. A. True B. False

B

Passage of the Americans with Disability Act, along with workplace redesign and training, has resulted in a dramatic lowering of workers' compensation costs to U.S. employers. A. True B. False

B

Private pension income represents the largest single component of an elderly person's overall retirement income. A. True B. False

B

Surveys indicate that pension programs are the most important benefit to the average person. A. True B. False

B

The unemployment insurance program is financed through federal and state taxes on both employees and employers. A. True B. False

B

U.S. workers are significantly more likely to be covered by defined benefit plans than Japanese or German workers. A. True B. False

B

Unemployment benefits are typically about 50 percent of an eligible individual's previous earnings and last for 52 weeks. A. True B. False

B

Unlike a cash balance plan, with a 401(k), all the contributions come from the employer. A. True B. False

B

Workers' compensation laws operate under the principle of employee-fault liability, meaning that an employee must establish gross negligence by the employer. A. True B. False

B