EMPLOYEE BENEFITS MANAGEMENT

EMPLOYEE BENEFITS MANAGEMENT - FN 4380 Employee Benefits...

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FN 4380 – Employee Benefits Management - Student Outline: Set 1 INTRODUCTION TO EMPLOYEE BENEFITS (Ch. 1) I. Definition of Employee Benefits All benefits and services, other than wages for time worked, that are provided to employees in whole or in part by their employers II. A brief history A. Early use - late 1800's B. Industrialization C. D. Labor unions E. Laws favoring/mandating benefits III. Current status of employee benefits A. Today, benefits constitute over 40% of payroll B. Challenges facing employers that influence benefit planning 1. Rate of health care cost increases 2. Slow growth of labor force/undereducated work force 3. Increasing complexity of government regulations 4. Aging population 5. Changing nature of families IV. Some possible reasons for providing employee benefits A. Concern for employees' welfare B. Attract, motivate, and retain good employees C. Facilitate systematic retirement of older employees; keep channels of promotion open D. Outcome of labor negotiations E. Tax advantages - For many benefits: 1
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1. Employers deduct benefit expenses 2. Employees defer/avoid taxes on benefits F. Advantages of group insurance G. Social pressures H. Government mandates V. Some possible drawbacks of providing employee benefits A. Cost B. Lack of appreciation by employees - Importance of benefit communication/education C. Employee preference for cash wages THE EMPLOYEE BENEFITS PLANNING PROCESS (optional reading: Ch. 2) A Functional Approach to Employee Benefit Planning 1. Classify needs and risks of employees and their dependents in functional categories, such as: a. death b. medical expenses c. disability d. retirement e. capital accumulation f. termination of employment/unemployment g. other (e.g. dependent care, retirement counseling, education) 2. Classify by categories the persons employer may want to protect: a. active full-time employees and their dependents b. retired employees and their dependents c. disabled employees and their dependents d. surviving dependents of deceased employees or retirees e. terminated employees and their dependents f. employees temporarily separated from service (e.g. layoffs and leaves of absence) g. other (e.g. part-time employees, directors) 3. Determine extent of desired protection in terms of the categories listed in 1 and 2 above 4. Analyze benefits presently available from all sources in terms of: a. types of benefits b. level of benefits c. eligibility requirements d. probationary periods e. employee contribution requirements, if any 2
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f. flexibility for employees in selecting benefits g. current participation in various benefits plans 5. Determine, by comparing 3 and 4 above,: a. gaps in benefits b. overlapping/excessive benefits 6. Consider possible changes in present benefit plan. May need or want to take into consideration: a. benefit plans of competitors or employers in general b. government regulations, legally mandated benefits c. requirements of labor agreements
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This note was uploaded on 04/24/2008 for the course FN 4380 taught by Professor Sommer during the Spring '08 term at Saint Mary's University Texas.

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EMPLOYEE BENEFITS MANAGEMENT - FN 4380 Employee Benefits...

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