Question 1

Which of the following statements is true about the Pension Benefit Guaranty Corporation (PBGC) ?

Accepted Answer

A)  It was created by the Consolidated Omnibus Budget Reconciliation Act (COBR
A)  of 1985.
B)  It guarantees a complete pension benefit replacement.
C)  It does not guarantee healthcare benefits.
D)  It is not funded by an annual contribution per plan participant.
E)  It allows payouts to be adjusted for cost-of-living changes.F) B) and C)
G) C) and E)

Question 2

Discuss how retirement plans can combine the advantages of defined benefit plans and defined contribution plans.

Accepted Answer

One way to combine the advantages of def...

Question 3

Benefit plans that permit employees to choose the types and amounts of benefits they want are called _____.

Accepted Answer

A)  defined benefit plans
B)  flex-plans
C)  standard benefits package
D)  flexible spending accounts
E)  traditional benefit plansF) A) and D)
G) B) and C)

Question 4

What factors should be considered when thinking about cost control strategies?

Accepted Answer

It is useful to consider three factors w...

Question 5

The _____ requires defined contribution plans holding publicly traded securities to provide employees with at least three investment options other than employer securities.

Accepted Answer

A)  Pensions Act of 2008
B)  Health Insurance Portability and Accountability Act of 1996
C)  Consolidated Omnibus Budget Reconciliation Act of 1985
D)  Employee Retirement Income Security Act of 1974
E)  Pension Protection Act of 2006F) None of the above
G) D) and E)

Question 6

One of the objectives of the unemployment insurance program is to offset lost income during voluntary unemployment.

Accepted Answer

A) True 
 B)False

Question 7

Workers' compensation benefits exclude rehabilitative services.

Accepted Answer

A) True 
 B)False

Question 8

The major advantage of a flexible spending account is that:

Accepted Answer

A)  dependent care expenses are covered through the same account.
B)  it increases the employees' take-home pay.
C)  unused funds revert to the employee.
D)  the account covers unpredictable expenses.
E)  it permits post tax contribution to an employee's account.F) D) and E)
G) B) and D)

Question 9

Financial Accounting Statement 106 requires that any benefits provided after retirement must be paid on a(n) _____ basis.

Accepted Answer

A)  pay-as-you-go
B)  accrual
C)  annual
D)  subtraction
E)  monthlyF) C) and E)
G) A) and D) B

Question 10

Fitness facility programs have two central goals: raising awareness levels of health-related issues and informing people on health-related topics.

Accepted Answer

A) True 
 B)False

Question 11

Medical insurance and disability insurance programs are legally required.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a major category of workers' compensation?

Accepted Answer

A)  Sustainability income
B)  Death of spouse benefits
C)  Rehabilitative services
D)  Housing care
E)  Pension servicesF) C) and E)
G) A) and B)

Question 13

In contrast to Social Security retirement benefits, unemployment benefits are taxed as ordinary income.

Accepted Answer

A) True 
 B)False  True

Question 14

Which of the following was an amendment to the Social Security Act of 1935?

Accepted Answer

A)  Descendant's insurance
B)  Inability insurance
C)  Estate insurance
D)  Hospital insurance
E)  Posterity insuranceF) A) and D)
G) All of the above

Question 15

Which of the following is the largest single component of the elderly's overall retirement income?

Accepted Answer

A)  Old age insurance
B)  Private pensions
C)  Earnings from assets
D)  Disability insurance
E)  Medical insuranceF) A) and C)
G) None of the above

Question 16

Unlike workers in most western European countries, who have nationalized health systems, the majority of Americans receiving health insurance get it through their (or a family member's)employers.

Accepted Answer

A) True 
 B)False  True

Question 17

Which of the following benefits involve the highest of costs?

Accepted Answer

A)  Legally required benefits
B)  Medical and other insurance
C)  Retirement and savings plans
D)  Payments for time not worked
E)  Supplemental payF) B) and D)
G) B) and C)

Question 18

Group insurance rates are typically lower than individual rates because:

Accepted Answer

A)  risks cannot be pooled together in group insurance.
B)  group insurance does not cover permanent disabilities.
C)  of economies of scale.
D)  it is exempt from taxes.
E)  group insurance lacks guaranteed coverage.F) None of the above
G) B) and C)

Question 19

Which of the following is true about defined contribution plans?

Accepted Answer

A)  They shift the investment risk to the employer.
B)  They present greater administrative challenges to employers.
C)  They promise a specific benefit level for employees upon retirement.
D)  They are preferred more in smaller companies than larger ones.
E)  They have become less common.F) C) and E)
G) A) and D)

Question 20

The state tax code requires that funds in the health care and dependent care accounts be earmarked in advance and spent during the plan year.

Accepted Answer

A) True 
 B)False

Exam 13: Employee Benefits

Which of the following statements is true about the Pension Benefit Guaranty Corporation (PBGC) ?

Correct AnswerverifiedShow Answer

Discuss how retirement plans can combine the advantages of defined benefit plans and defined contribution plans.

Correct AnswerverifiedOne way to combine the advantages of def...View AnswerShow Answer

Benefit plans that permit employees to choose the types and amounts of benefits they want are called _____.

Correct AnswerverifiedShow Answer

What factors should be considered when thinking about cost control strategies?

Correct AnswerverifiedIt is useful to consider three factors w...View AnswerShow Answer

The _____ requires defined contribution plans holding publicly traded securities to provide employees with at least three investment options other than employer securities.

Correct AnswerverifiedShow Answer

One of the objectives of the unemployment insurance program is to offset lost income during voluntary unemployment.

Correct AnswerverifiedShow Answer

Workers' compensation benefits exclude rehabilitative services.

Correct AnswerverifiedShow Answer

The major advantage of a flexible spending account is that:

Correct AnswerverifiedShow Answer

Financial Accounting Statement 106 requires that any benefits provided after retirement must be paid on a(n) _____ basis.

Correct AnswerverifiedB

Fitness facility programs have two central goals: raising awareness levels of health-related issues and informing people on health-related topics.

Correct AnswerverifiedShow Answer

Medical insurance and disability insurance programs are legally required.

Correct AnswerverifiedShow Answer

Which of the following is a major category of workers' compensation?

Correct AnswerverifiedShow Answer

In contrast to Social Security retirement benefits, unemployment benefits are taxed as ordinary income.

Correct AnswerverifiedTrue

Which of the following was an amendment to the Social Security Act of 1935?

Correct AnswerverifiedShow Answer

Which of the following is the largest single component of the elderly's overall retirement income?

Correct AnswerverifiedShow Answer

Unlike workers in most western European countries, who have nationalized health systems, the majority of Americans receiving health insurance get it through their (or a family member's)employers.

Correct AnswerverifiedTrue

Which of the following benefits involve the highest of costs?

Correct AnswerverifiedShow Answer

Group insurance rates are typically lower than individual rates because:

Correct AnswerverifiedShow Answer

Which of the following is true about defined contribution plans?

Correct AnswerverifiedShow Answer

The state tax code requires that funds in the health care and dependent care accounts be earmarked in advance and spent during the plan year.

Correct AnswerverifiedShow Answer

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One way to combine the advantages of def...
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It is useful to consider three factors w...
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B

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True

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True

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