PASS WITH UPDATED CEBS - GBA 1 MODULE
1EXAM (ACTUAL 2024) QUESTIONS WITH
VERIFIED SOLUTIONS GRADED A+
4.2 Describe the reasons that the functional approach is
considered to be an appropriate approach for the
effective planning, designing and administration of
employee benefits. - --ANSWERS____First, employee
benefits are a very significant element of total employee
compensation and generally are a very tax-effective way
of compensating employees. Second, employee benefits
are a large source of employer labor cost so it is smart
for the programs to be managed effectively. Third, using
the functional approach can eliminate overlap and fill
gaps. Fourth, it helps keep an employee benefit plan
current, competitive, and in compliance with regulations.
4.3 What elements of its compensation system should
an employer seek to balance in designing a total
compensation package? - --ANSWERS____Employers
should balance basic cash wages and salary, current
incentive compensation, longer term incentive plans and
so-called employee benefits.
, PASS WITH UPDATED CEBS - GBA 1 MODULE
1EXAM (ACTUAL 2024) QUESTIONS WITH
VERIFIED SOLUTIONS GRADED A+
5.2 An analysis of an existing or proposed employee benefit
program involves examining levels of benefits and length-of-
service requirements. Explain how the concept of replacement
ratio can be used by firms for setting benefit levels of
retirement and disability plans - --ANSWERS____The
retirement income objective might be expressed in terms of
some percentage of the estimated final pay of an employee, or
a so-called replacement ratio. In designing a retirement plan to
meet this objective, income from Social Security, various
capital accumulation benefits and the retirement plan itself
would be considered. The same kind of analysis can be used
in designing a disability income plan.
5.2 Continued - Explain how the use of length of service, or
probationary periods, may vary with respect to protection-
oriented benefits and accumulation-oriented benefits - --
ANSWERS____Protection-oriented benefits consist of
medical expense benefits, life insurance benefits and short-
and long-term disability income benefits that protect
employees and their dependents against serious loss exposures
that could spell immediate financial disaster. Such benefits
may have a relatively short probationary period because of the
need for immediate coverage of the employees and their
dependents.
Accumulation-oriented benefits, such as pension plans, profit-
sharing plans, savings or thrift plans and so forth, reward an
employee for relatively long service with an employer. These
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