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

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

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

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%

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

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

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

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

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

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

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

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

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

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

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

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

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