Chapter 13 - Benefit Options

25. (p. 466-467) _____ plans are more favorable to long-term than to short-term employees. 

A. 

401 K

B. 

Cash balance

C. 

Profit sharing

D.

 Traditional defined benefit

Difficulty: Medium

 

26. (p. 469) An employer experiencing high turnover and seeking to reduce pension cost is likely

to prefer: 

A.

 full vesting after three years.

B. 

full vesting after six years.

C. 

full vesting after seven years.

D. 

to offer portability rights.

Difficulty: Difficult

 

27. (p. 469) An employer seeking to use pensions to reduce turnover is likely to prefer: 

A. 

fully vested after three years.

B.

 vesting 20 percent after 2 years and 20 each year thereafter.

C. 

fully vested after two years.

D. 

vesting schedules are unlikely to affect turnover.

Difficulty: Difficult

 

28. (p. 470) The first question to ask in determining how much retirement income an employer

should provide is: 

A. 

Should Social Security payments be considered?

B. 

How should seniority be factored into the payout formula?

C.

 What level of retirement compensation should be provided?

D. 

Should other, non-Social Security income sources be considered?

Difficulty: Medium

 

13-7

© 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

29. (p. 470-71) An employee who changes jobs four or more times during their career will likely

experience a pension approximately _____ as that of an employee whose working career is spent

with one employer. 

A. 

twice as large

B. 

the same size

C. 

one fourth the size

D.

 half the size

Difficulty: Difficult

 

30. (p. 471) Roughly _____ of all employees have access to paid life insurance. 

A.

 three-fourths

B. 

half

C. 

one-third

D. 

a quarter

Difficulty: Medium

 

31. (p. 472) A type of general health care plan in which health services are provided for a fixed

fee at a specific site is: 

A. 

a PPO.

B.

 an HMO.

C. 

a POS.

D. 

the traditional health care.

Difficulty: Medium

32. (p. 473)

The type of health insurance requiring covered employees to use designated doctors

and facilities is __________.

A. 

a PPO

B.

 an HMO

C. 

a POS

D. 

the traditional health care

Difficulty: Medium

13-8

© 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.