Mgmt 202 Final Paper
MGMT 202 – Human Resources Management
Spring 2014
Study Guide – Chapter 13
(Page 558) What are the aspects that make benefits quite different from direct compensation? (1) Although direct compensation is subject to government regulation, the scope and impact of regulation on benefits is far greater. Some benefits, such as Social
Security, are mandated by law. Others, although not mandated, are subject to significant regulation.
(2) Organizations so typically offer benefits that they have come to be institutionalized. Providing medical and retirement benefits of some sort remains almost obligatory for many (e.g., large) employers.
(3) Benefits programs are much more complex than most compensation programs. Benefits rules and their …show more content…
A separate account of up to $5,000 per year is permitted for pretax contributions to cover dependent care expenses. The major benefit of such plans is the increase in take-home pay that results from pretax payment of health and dependent care expenses. The major drawbacks to such plans include the fact that funds must be earmarked in advance and spent during the plan year. Remaining funds revert to the employer; therefore, the accounts work best to the extent that employees have predictable expenses.
(Pages 589 – 590) Discuss the Financial Accounting Statement (FAS) 106 rule.
Financial Accounting Statement (FAS) 106, issued by the Financial Accounting
Standards Board, became effective in 1993. This rule requires that any benefits
(excluding pensions) provided after retirement (the major one being health care) can no longer be funded on a pay-as-you-go basis. Rather, they must be paid on an accrual basis, and companies must enter these future cost obligations on their financial
Page 3 of 13
MGMT 202 – Human Resources Management
Spring 2014
Study Guide – Chapter 13 statements. The effect on financial statements can be
Spring 2014
Study Guide – Chapter 13
(Page 558) What are the aspects that make benefits quite different from direct compensation? (1) Although direct compensation is subject to government regulation, the scope and impact of regulation on benefits is far greater. Some benefits, such as Social
Security, are mandated by law. Others, although not mandated, are subject to significant regulation.
(2) Organizations so typically offer benefits that they have come to be institutionalized. Providing medical and retirement benefits of some sort remains almost obligatory for many (e.g., large) employers.
(3) Benefits programs are much more complex than most compensation programs. Benefits rules and their …show more content…
A separate account of up to $5,000 per year is permitted for pretax contributions to cover dependent care expenses. The major benefit of such plans is the increase in take-home pay that results from pretax payment of health and dependent care expenses. The major drawbacks to such plans include the fact that funds must be earmarked in advance and spent during the plan year. Remaining funds revert to the employer; therefore, the accounts work best to the extent that employees have predictable expenses.
(Pages 589 – 590) Discuss the Financial Accounting Statement (FAS) 106 rule.
Financial Accounting Statement (FAS) 106, issued by the Financial Accounting
Standards Board, became effective in 1993. This rule requires that any benefits
(excluding pensions) provided after retirement (the major one being health care) can no longer be funded on a pay-as-you-go basis. Rather, they must be paid on an accrual basis, and companies must enter these future cost obligations on their financial
Page 3 of 13
MGMT 202 – Human Resources Management
Spring 2014
Study Guide – Chapter 13 statements. The effect on financial statements can be