Professional Documents
Culture Documents
Part of Total Compensation Some Government Mandated Some Incentive Related Part of Cost of Doing Business Indirect Compensation
EMPLOYEES
Types of Benefits
Time-off (vacation, sickness, holidays, etc.) Legal Social Security Medical Payments Retirement Paid Rest Periods (breaks) Life Insurance
INSURANCE
Group life insurance Health care insurance Legal insurance
RETIREMENT BENEFITS
Pension plans Deferred compensation plans Pre-retirement counseling
$4000
COST
$1500
YEAR
Major Concerns
Federal Regulation - Not Total Coverage Reward for Long Service Originally Now Based on Earnings Philosophy
Contributory (joint pay) Non-Contributory (employer pays) Classified by Amount of Benefits to be Paid
Noncontributory Plan
Amount is Specifically Defined Years of Service Required Average Earnings During Certain Years Age at Retirement Example: Average Annual Salary of Last 3-5 years x number of years of service
Basis Upon Which the Employer Pays Paid to Thrift Plan, IRA, etc. Benefits Depends Upon Accumulation
Vesting
A guarantee or accrued benefits to participants at retirement age, regardless of their employment status at that time.
Vesting
Guarantee of Benefits Paid at Retirement Regardless of Last Employment Non-revokable by Employer Vested After XX Years Complex Rules (ERISA)
Guarantee of Income Retirement, Disability, Unemployment Time Limits Complex Rules Dedicated Tax on Earnings
Pension Funds
Privately Managed $3 Trillion in Assets Invested in Stocks and Bonds
Unemployment Insurance
Defined Period (26 weeks) Register for Work Requirement Funded by Payroll Tax Amount Based on Wages Supplemental Unemployment Benefits (Private)
Federal-or-state-mandated insurance provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness.
Worker's Compensation
Work Related Accident Compulsory Complex Law Based on Wages Permanent or Partial Disability
Silver Handshake
An early-retirement incentive in the form of increased pension benefits for several years or a cash bonus.
Philosophy Earned vs reward Source of funds Contributory vs non-contributory Amount of benefits Defined benefits vs defined contributions Custody of pension funds Insured vs trusteed plans Protections against loss of funds Protection against loss of purchasing Investment problems Where and where not to invest Tax consequences
Benefit Links