Employee Benefits

EmployeeBenefits

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EmployeeBenefits

  1. ERISA

DespiteERISA not calling for employers to offer a pension plan, a companydeciding to have one is strictly under the control of its provisions(Newman,et al. 2014, p. 486).It has two goals in its provisions, which aim at safeguarding theinterests of about 100 million active participants, and to motivatethe growth of the pension plans.

  1. Defined Contribution Plans

Thedefined-contribution pension plans are becoming popular in the UnitedStates, while the defined benefit plans are losing their popularity.This is because of the cost saving ability of defined-contributionplans. The chief finance officers find it hard to conduct definedbenefit plans. This is attributed to the need to determine the amountto be saved each year to achieve the set target to be paid every yearin future to the beneficiary. It is hard due to the volatility in thestock market as predicting the amount to be saved becomes hard,leading to shortfalls in the funding of the plans. However, thedefined-contribution plans are advantageous, as each employee has anaccount with which they make contributions (Newman,et al. 2014, p. 466).Therefore,at retirement the employee receives a pension based on theirpersonal and employer contributions, together with the gains in thestock investments. Additionally, the defined-contribution plans aremore portable. Hence, the job-hopping employees can take theirpension savings to the next job with ease.

  1. Health Insurance

Thereare three general strategies accessible to the benefits managers formonitoring the fast escalating costs of health care. The first one isby motivating employees to change their demand for healthcare,through the change in administration or design of health insurancepolicies. Secondly, they can participate in business associations fordata, and also redesign the health care delivery system. Lastly, theycan partake of choices like POSs, PPOs, HMOs, and consumer-directedhealth care plans (Newman,et al. 2014, p.475).An organization, which am familiar with, selected the traditionalplans that include POS, PPO, HMO. This is because they have a taxexempted contribution account. The strategy is the best as theemployee and employer contributions are not taxed hence, cheaper.

  1. Legally Required Benefits

Theseare the benefits required by the statutory law. They include SocialSecurity, Worker’s Compensation, and the Unemployment Compensation(Newman,et al. 2014, p. 459).The implications for strategic compensation are medical care forinjuries during work, benefits for temporary disability, survivorbenefits, and training and rehabilitation for those unable tocontinue with work.

References

Newman,J., Gerhart, B., &amp Milkovich, G. (2014). Compensation.