B1 Regulatory Environments for Benefits Programs Questions and Answers

It is required by the Department of Labor

It is required in determining increase budgets

It determines what information and data sources will be used in the audit

It builds in a process of continuous improvement

Job descriptions

Job specifications

Performance evaluations

Salary surveys

The male employees have substantially more education than the female employees.

All of the women have some professional certification or registration, whereas none of the men have comparable credentials.

The differential is due to the fact that the men have more seniority with the employer.

The women are all graduates of the most prestigious schools, and graduates from those schools command higher salaries.

They require complex actuarial calculations and assumptions.

The benefit is based on a formula that considers pay and service.

They generally provide better benefits to employees with longer service.

The employee assumes the risk for the investments.   

Pricing your products appropriately

Understanding your business and its competitive strengths and weaknesses

Forecasting profit, growth and investment performance to develop realistic budgets

Evaluating prior year performance for the narrative portion of annual financial reports

They tend to be fairly consistent because the elements of pay may differ, but the concerns are universal.

They generally require a greater degree of detail for lower level employees who have less of an understanding of pay plan design.

They usually require more detail for senior employees regarding plan details and performance and the needs from one employee group to another can vary greatly.

They should be kept to a minimum for employees at all levels to maximize efficiency and efforts can be focused only on those who have questions.

Personal leave

Sabbatical

Severance allowances

Paid time off (PTO) bank   

Job descriptions must be written to ensure they cover the critical functions of the job

Companies should determine pay based on physical skills

Companies must conduct pre-employment medical exams on all new employees

Special promotion requirements must be developed for the disabled employee

They are all reported on the balance sheet.

They are all sources of capital.

They all incur the same costs to the business.

Nothing. Each of these is a different financial metric.

Compensation costs eventually stabilize and become a consistent percent of revenue.

Compensation costs and revenue increase at approximately the same rate.

Compensation costs eventually decrease as a percent of revenue, increasing profit growth.

Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.