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    Non-retirement Benefits

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    How can you assess the advantages to participants and employers provided by non-retirement benefits other the normal medical, dental and vision plans? Can you please give a minimum of five examples?

    What are some factors that employers use to decide which non-retirement benefits to offer their employees. Please be precise and specific with understandable language.

    Please site well on references, personal experiences are also welcomed but please distinguish from actual references.

    Thank you.

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    https://brainmass.com/business/compensation-strategies/non-retirement-benefits-66447

    Solution Preview

    Please refer to attached response. I hope this helps and take care.

    How can you assess the advantages to participants and employers provided by non-retirement benefits other the normal medical, dental and vision plans? Can you please give a minimum of five examples?
    First, let's explore what is meant by non-retirement benefits other than the above mentioned ones? I was unable to find a definition, but found some information that tells us the main types of benefits that fall under this criterion:

    Example 1:

    The following list suggests that non-retirement benefits include extra cash payments, services, and cafeteria plans. However, as we see later, there are also parking privileges, and personal time off (Reserve/National Guard, Jury Duty, Death in family, Sabbatical leaves, etc.), amongst others, to add to this list:
    OTHER NONRETIREMENT BENEFITS AND CAFETERIA PLANS
    Other Nonretirement Benefits: Meeting Personal and Family Needs

    - Meaning of Highly Compensated Employee
    - Payments For Time Not Worked (e.g., Vacation, Holidays)
    - Extra Payments To Employees (e.g., Educational assistance: books, fees, tuition; taxable income for graduate and professional schools, Moving expense)

    Services To Employees
    Cafeteria Plans
    Objectives
    The Rationale for Cafeteria Plans
    The Nature of Cafeteria Plans
    Types of Plans (see example below)
    Obstacles to Cafeteria Plans
    Issues in Plan Design
    Source: http://www.ifebp.org/Bookstore/pbempben.asp

    Example 2: Cafeteria Plans (this is classified as a non-retirement benefit; however, I ran across one source that referred to it separately)
    A cafeteria plan is a flexible benefit plan that allows employees to choose their benefits within certain prescribed limits. Among the choices that might be available in a typical plan are:
    - Medical plan options that offer a choice between a traditional indemnity plan and an HMO.
    - Group term life insurance for the employee and their dependents.
    - Optional 401(k) retirement plan contributions.
    - Spending accounts for unreimbursed medical expenses (e.g. deductibles and co-payment amounts) and dependent care (e.g., day care) expenses.
    The underlying rationale of a cafeteria plan is simply the recognition that "one size doesn't fit all." Providing an individualized benefit plan that allows employees to tailor their benefits to their particular family needs may be one of the best ways to attract and retain valuable employees. http://www.nmfn.com/tn/netserv--business--cafeteria_plan_pg
    See http://www.dol.gov/dol/topic/health-plans/erisa.htm.

    There are several ways that we can assess the advantages to both the participants and the employers.
    1. Look to Statistics: We could calculate the overall savings that these fringe benefits provide (e.g., tax savings, etc.), through statistics and income tax reports (although it might not be an easy chore to get the exact figures).
    Example:
    For example, unlike employee compensation paid in cash, many fringe benefits are exempt from income and payroll taxes. These figures can be found in statistics. For example, the exemption of employer-paid health and life insurance premiums from tax was predicted to cost about $55 billion in income taxes and $40 billion in payroll taxes in 2000. This is a clear indicator that it is a financial advantage to participants. (1)
    Suggestion awards: income taxable; Service awards: de minimus; Productivity and safety achievement awards; Holiday bonuses and gifts (http://finance.baylor.edu/rmi4330/lectures/ch16-17%20other%20benefits.ppt.).

    2. Look to employees through surveys or face-to-face meeting:
    Example:
    The law explicitly excludes from gross income employer-paid dependent care and miscellaneous benefits such as employee discounts and parking valued below a specified limit. Again, it is a financial advantage, as the participants end up with more take home pay at the end of the day, mainly because this money is not considered taxable income, and the lower your ...

    Solution Summary

    By responding to the questions, this solution discusses aspects of non-retirement benefits e.g. assessing the advantages to participants and employers provided by non-retirement and factors that employers use to decide which non-retirement benefits to offer their employees. Research validated with examples provided.

    $2.19

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