Employment & Environment: Employee Benefits Flashcards Preview

REG > Employment & Environment: Employee Benefits > Flashcards

Flashcards in Employment & Environment: Employee Benefits Deck (5)
Loading flashcards...
1

Employment & Environment:
Employee Benefits
ERISA

Purpose
- protect employee rights in existing pension plans
- offer tax incentives to employers
- either tax cuts or deferred taxation
Characteristics
- preempts state law
- applies to employee benefit and welfare plans
- prohibits discrimination against lower level employees
- set up Pension Benefit Guarantee Corporation for plan termination insurance
- does not require employers to setup plans
- employee contributions must "vest"
- generally vest employer contributions after 5 years
- also partial vesting
- standards on investing of funds
Does NOT Apply To:
- Federal, state, and local governments or
- church plans
Enforced By:
- Department of Treasury
- private lawsuits
Types of Pension Plans
- Defined Benefit
- Defined Contribution
- 401(k)

2

Employment & Environment:
Employee Benefits
Pension & Retirement Plan Liability

Fiduciary Duty on Plan Management
- anyone named in plan as fiduciary
- anyone who controls the plan, renders advice for a fee, has discretionary control
- accountants who merely audit are not
Duties
- act with reasonable care
- discharge duties solely in interest of plan participants
Breach
- can be liable if the accountant participates in fiduciary's breach
- or malpractice suits

3

Employment & Environment:
Employee Benefits
COBRA

- provides health insurance after job loss
- Qualifying Events
- Termination
- Reduction of hours causing health insurance loss
- keep previous coverage if:
- they pay for it
- for employee and spouse, and dependent children
- 18 months from qualifying event
- 29 months for disability

4

Employment & Environment:
Employee Benefits
Family Medical Leave Act

- balance employees workplace demands with family
Provisions
- eligible employee is entitled to 12 weeks of unpaid leave without losing job
- birth of child
- placement of adoptive child
- personal serious health condition
- care of son, daughter, spouse, or parent
- impending order due to active duty of child, spouse, or parent
Eligibility
- 1,250 hours in 12 months

5

Employment & Environment:
Employee Benefits
Missed

- officer/director is a "responsible person" not CPA
- gifts are not taxable income under SECA
- if the company does not remit the employees' share, it remains primarily liable
- self-income on quilts and director fees

Decks in REG Class (109):