1. Categories of Employee Benefits
RETIREMENT BENEFITS
Pension plans
Deferred compensation plans
Pre-retirement counseling
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

2. Categories of Employee Benefits
EMPLOYEE SERVICES
Employee assistance program
Counseling services
Educational assistance plans
Child care
Elder care
Food services
Health services
Legal services
Financial planning
Housing and moving expenses
Transportation pooling/parking
Purchasing assistance
Credit unions
Social and recreational services
Awards
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

3. Employee Benefit Costs
30-40% of the Annual Wages
Fastest Growing Part of Total Compensation
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

4. Typical Cost of Benefits
TYPES OF BENEFITS
TOTAL PERCENTAGE, ALL COMPANIES
Payments for vacations, sick leave, holidays, etc.
12.0%
Legally required payments
10.0 %
Medical and medically related benefit payments
Retirement and savings (employer’s share)
7.0 %
Paid rest periods, lunch periods, etc.
3.0 %
Miscellaneous benefits
1.0%
Life insurance
.5%
Total employee benefits as percent of payroll
43.5%

5. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Health Plan Costs Climb Higher Annually Average Annual Health Plan Costs Per Employee
$4000
$1500
COST
YEAR
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

6. Flexible Benefits Plan (Cafeteria Plans)
Benefit plan that enable individual employees to choose the benefits that are best suited to their particular needs.
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

7. Flexible Benefit Plans
Employees Choose
Cafeteria Plans
Cost Attached
Some Government Requirements
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

8. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Major Concerns
Rising Costs
Controlling Costs
Legal Concern
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

9. Pension Plans: Provide for Retirement Income
Federal Regulation - Not Total Coverage
Reward for Long Service Originally
Now Based on Earnings Philosophy
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

10. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Types of Pension Plans
Contributory (joint pay)
Non-Contributory (employer pays)
Classified by Amount of Benefits to be Paid
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

11. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Noncontributory Plan
A pension plan where contributions are made solely by the employer.
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

12. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Defined Benefit 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”
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

13. Defined Contribution Plan
Basis Upon Which the Employer Pays
Paid to Thrift Plan, IRA, etc.
Benefits Depends Upon Accumulation
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

14. Federal Regulation (ERISA)
Employee Retirement Income Security Act
Informed About Facts
Benefits Defined
Complex Law
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

15. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Vesting
A guarantee or accrued benefits to participants at retirement age, regardless of their employment status at that time.
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

16. Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA
Vesting
Guarantee of Benefits
Paid at Retirement
Regardless of Last Employment
Non-revokable by Employer
Vested After XX Years
Complex Rules (ERISA)
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA

17. Vesting Provisions (General Plans)
General Provisions*
5-Year Vesting: An employee must receive nonforfeitable rights after five years of service to all accrued benefits derived from employer contributions.
3- to 7-Year Vesting: An employee must receive nonforfeitable rights after three years of service to 20 percent of accrued benefits derived from employer contributions. Nonforfeitable rights increase 20 percent each year until the employee is 100 percent vested in the employer-derived accrued benefits after 7 years of service.
Unit - V 16BA609 & Human Resource Management, Mr.K.Mohan Kumar, AP/MBA