TAILIEUCHUNG - Lecture Employee benefits and retirement planning - Chapter 39: Cafeteria plans

This chapter begins by covering when a cafeteria plan might be used, and highlights flexibility and employee satisfaction. Advantages and disadvantages are discussed next, with a key disadvantage being the complex tax requirements. The next section provides an example of a cafeteria plan, and is followed by tax implications. | What is it? A plan that allows employees, within limits, to chose benefits from a “cafeteria” of benefit plans provided by their employer Cafeteria plans MUST include a “cash option” Copyright 2009, The National Underwriter Company When is it indicated? Benefit needs of employees vary greatly Employees want to choose benefits to suit own needs Employer wants to maximize employee satisfaction with benefit package Employer is large enough to afford expense of such a plan Copyright 2009, The National Underwriter Company Advantages Employees more likely to appreciate value of their benefit package Flexibility of cafeteria plans help meet various employee needs Cafeteria plans can help control employer costs since employees select only the benefits that they want Copyright 2009, The National Underwriter Company Disadvantages Complex and costly to design and administer Not all insurers will provide their programs on a cafeteria plan basis (., life and health) Plan must meet complex tax requirements Highly compensated employees may lose tax benefits if plan discriminatory Copyright 2009, The National Underwriter Company Example of Cafeteria Plan All employees given basic benefit package with term life insurance equal to 1½ times salary medical expense insurance for employee and dependents short and long-term disability income insurance Employees also receive “credits” based on salary and years of service that can be applied to additional benefits specified by the employer Copyright 2009, The National Underwriter Company Tax Implications Cafeteria plans must comply with IRS Code Section 125 to avoid constructive receipt and consequent tax on value of benefits available in the plan, even if participant chooses nontaxable benefits Copyright 2009, The National Underwriter Company Tax Implications Under Section 125, only certain ‘qualified benefits’ can be made available under the plan “Qualified benefits” under a cafeteria plan cash most tax-free .

• Quản trị kinh doanh
• Employee benefits
• Retirement planning
• Retirement plan design
• Employee’s retirement
• Cafeteria plans
• IRC section 125
• Employee benefit planning
• Individual benefits statement
• Employee discounts
• Company cafeterias
• Employee stock purchase plans
• Section 423 plans
• Key employee life insurance
• Corporate owned life insurance
• Simplified employee pension
• Salary reduction SEP
• Scheduled benefits
• Legal services plan
• Lecture Human resource management
• Human resource management
• Human resource
• Quản trị nhân sự
• Employee benefits programs
• Restricted stock plans
• Employee retention
• Strategic Benefits
• Development Benefits
• Financial Reporting
• Financial Management
• Human Resources
• Legal services plans
• Employer select
• Designing retirement plans
• Stock options
• Nonstatutory stock option
• Incentive stock options
• Alternative minimum tax
• Flexible spending accounts
• Medical reimbursement
• Group term life insurance
• Executive carve out
• Split dollar life insurance
• Endorsement method