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CHAP13.TB - Chapter 13 Benefit Plans True/False 1 The...

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Chapter 13 Benefit Plans True/False 1. The decision about how flexible a benefit plan should be is a strategic decision made by the firm's managers. Answer: True Page: 467 Moderate 2. Diversity in the workforce requires more flexible benefit plans. Answer: True Page: 468 Easy 3. Employers want to offer a benefit package that allows them to compete successfully in the labor market for employees but not one that is so costly that labor costs are raised above those of the competition. Answer: True Page: 468 Moderate 4. If a firm wishes to achieve a differential advantage in its benefit offerings, it must know what competitive employers in the labor market are offering and then design a program that is better. Answer: True Page: 468 Moderate 5. Most companies offer a small variety of benefits. Answer: False Page: 469 Difficult 6. Workers’ compensation covers emotional consequences resulting from physical injury. Answer: True Page: 470 Easy 7. Employees collect worker’s compensation either in the form of cash paid directly to the employee or in the form of reimbursement for medical expenses, pain, and suffering. Answer: True Page: 470 Easy 8. Workers' compensation is one of the compulsory benefits a firm must offer.
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Chapter 13—Benefit Plans Answer: True Page: 472 Moderate 9. Social security protects employees from costs due to injury on the job. Answer: False Page: 473 Easy 10. Unemployment compensation benefits are provided to all employees when they retire at age 65. Answer: False Page: 473 Moderate 11. Social Security is fully funded through taxes on employees' wages. Answer: False Page: 474 Difficult 12. Unemployment compensation is given to every employee who leaves a job, regardless of the circumstances under which he or she leaves. Answer: False Page: 475 Difficult 13. An unfunded pension plan pays pensions out of future earnings. Answer: False Page: 479 Difficult 14. The major advantages of an IRA are that the employee can decide how to invest the extra retirement income, and a tax shelter is created because income tax is deferred until retirement when total income is presumable lower and, hence, taxed at a lower rate Answer: True Page: 480 Moderate 15. Some pension plans can be moved without losing benefits when the employee changes to a new employer. Answer: True Page: 481 Moderate 16. An insurance company self-funded plans are not funded by the employer. Answer: False Page: 488 Difficult 17. Elder care is likely to be a popular benefits issue in the near future. Answer: True Page: 496 Easy 13-2
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Chapter 13—Benefit Plans 18. Perks are special types of additional or added noncash compensation in the form of benefits or special privileges. Answer: True Page: 496 Moderate 19. Because of the increase of women in the workforce, childcare is likely to become a benefit issue. Answer: True Page: 497 Easy 20. To determine the cost effectiveness of a benefits program, controlled experiments between types of benefits packages needs to be conducted.
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