Chapter 13 - Benefit Options

63. (p. 453) The two generic types of pension plans are contributory plans and noncontributory

plans. 

FALSE

Difficulty: Medium

 

64. (p. 466) Companies are turning away from 401K type pension plans because they require

putting money in "up front" rather than when workers retire. 

FALSE

Difficulty: Easy

 

65. (p. 466) Most employers prefer defined contribution pension plans to defined benefit plans. 

TRUE

Difficulty: Easy

 

66. (p. 466) An advantage to employees of defined contribution (DC) plans over defined benefit

is DC plans tend to vest faster.

TRUE

Difficulty: Medium

67. (p. 466) A 401K is an example of a defined benefit plan. 

FALSE

Difficulty: Easy

 

68. (p. 4567) A qualified deferred compensation plan offers tax advantages to employers. 

TRUE

Difficulty: Difficult

 

13-15

© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any

manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 13 - Benefit Options

69. (p. 467-68) Employees are required to make contributions to cash balance plans. 

FALSE

Difficulty: Medium

 

70. (p. 468) An IRA is retirement savings plan that is not managed by an employer. 

TRUE

Difficulty: Easy

 

71. (p. 468) The Employee Retirement Security Act states that employers must offer a retirement

plan to their employees if they work at least 1250 hours per year. 

FALSE

Difficulty: Medium

 

72. (p. 469) Vesting is the amount of time an employee must work for an employer to be entitled

to their employer's contributions to a pension. 

TRUE

Difficulty: Easy

 

73. (p. 469) Under the Economic Growth and Tax Reconciliation Act of 2001, employers have

three vesting schedule options. 

FALSE

Difficulty: Medium

 

74. (p. 469) The Pension Benefit Guarantee Corporation protects vested benefits of people in

terminated pension plans. 

TRUE

Difficulty: Medium

 

13-16

© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any

manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 13 - Benefit Options

75. (p. 473) Employees have greater choice of doctors in an HMO than in a PPO. 

FALSE

Difficulty: Medium

 

76. (p. 475) Requiring a second opinion prior to surgery is an example of a method to reduce

employee demand for health care. 

TRUE

Difficulty: Easy

 

77. (p. 477) Small private employers have recently begun reducing the number of paid holidays. 

TRUE

Difficulty: Medium

 

 

Short Answer Questions

 

78. (p. 445) Which are the benefits required by statutory law? 

Benefits that are required by statutory law are workers' compensation, social security, and

unemployment compensation.

Difficulty: Medium

13-17

© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any

manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.