CEBS GBA Exam 1 2025 Questions and
Answers 100% Pass
Broad view of Employee Benefits (Mod 1.1) - ✔✔Considers Employee Benefits to be
virtually any form of compensation other than direct wages paid to Employees (Ex:
WC, Unemployment, State DI, SS, Vacation, Holidays, 401K/Retirement, Employer
share of Medical, Severance Pay, Child Care, etc..)
Narrow view of Employee Benefits (Mod 1.1) - ✔✔Any type of plan sponsored or
initiated unilaterally or jointly by Employees and Employers and engaged in providing
benefits that result from the employment relationship and that are not underwritten or
paid directly by the government; (Ex: Benefits excluded include those legally mandated
- WC, SS).
Impact of Labor Unions on Employee Benefits (Mod 1.2) - ✔✔Through Collective
Bargaining, Employee Benefit Plans have been impacted. In 1948, National Labor
Relations Board (NLRB) ruled in Inland Steel that the duty to bargain in good faith over
wages also included insurance and fringes (pension). In WW Cross & Co, NLRB ruled
wages included health and accident plan.
What is the Taft-Hartley Act? (Mod 1.2) - ✔✔Also called, Labor-Management Relations
Act, Taft-Hartley sets framework for good-faith collective bargaining over wages,
hours, conditions and terms of employment/employee benefits. Along with Internal
Revenue Code (IRC), they established the distinction between retirement and welfare
benefits and also provided regulatory framework for admin in a CBA (legislative basis
on which jointly trusteed benefit plans are founded).
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,3 Examples of Tax Advantages of Employee Benefit Plans (Mod 1.2) - ✔✔1: Employer
Contributions are Tax Deductible
2: Employer Contributions are not considered income to Employees
3: Certain Retirement Benefits Accumulate Tax-Free until distributed.
Examples of Questions that should be addressed when creating benefit objectives (Mod
1.3) - ✔✔Ex: What benefits should be provided? Who should be covered? Should
Employees have options? How should plan be financed? How should plan be
administered? How should plan be communicated to Employees?
What is the Functional Approach to Employee Benefit Planning? (Mod 1.4) -
✔✔Application of a systematic method of analysis to an Employer's Total Employee
Benefits Program. It analyzes the organization's EBP as a whole in terms of its ability to
meet various employee's needs and to manage loss exposures within the overall
compensation goals and parameters.
Why is the Functional Approach appropriate when planning, designing and
administering Employee Benefits? (Mod 1.4) - ✔✔1: EE Benefits Significant Element of
EE Comp and are a Tax-Effective Way to Compensate
2: EE Benefit Represent Large Labor Cost, so ER's should effectively plan/cost-control
3: In the past, EE Benefits were adopted on piece-meal basis; helps to now fill
gaps/overlap
4: Systematic Approach to planning helps to keep the EBP current, competitive and in
compliance with updated requirements (ACA)
5: Benefits to be integrated properly together
Compare Compensation/Service Oriented Benefit Philosophy with the Needs-Oriented
(Mod 1.4) - ✔✔Compensation/Service: EBP comprised of primarily compensation,
service or both. Level of benefits tied to salary or pay levels/years of service
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,Needs Orientated: Focuses on Needs of EE's and their dependents
Identify Steps in Applying Functional Approach (Mod 1.4) - ✔✔1: Classify EE/Dep
Needs & Objectives (in logical/functional categories)
2: Classify Categories of EE's to be protected
3: Analyze present benefits in terms of functional categories of needs/objectives,
persons to benefit, and regulatory requirements
4: Determine any gaps or overlap in benefits from all sources in terms of functional
categories of needs & the persons to be protected
5: Consider recommendations for changes
6: Estimate costs/savings from each recommendation
7: Evaluate alternative methods of financing for those recommended benefits (and
existing ben)
8: Consider other cost-saving techniques
9: Decide upon appropriate benefits and methods of financing as a result of analysis
10: Implement Changes
11: Communication Changes to Employees
12: Periodically re-evaluate EBP
Define Needs/Exposures covered under EBP (Mod 1.4) - ✔✔1: Medical Expenses
(EE/Dep)
2: Losses due to Disability (Short/Long Term)
3: Death (EE/Dep/Retirees)
4: Retirement Needs
5: Capital Accumulation Needs/Goals
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, 6: Needs for Unemployment/Layoff/Termination
7: Needs for Financial/Retirement Counseling
8: Losses from property/liability exposures
9: Needs for Dependent Care Assistance
10: Needs for Educational Assistance (EE/Dep)
11: Needs for Custodial-Care Expenses (LTC)
12: Other Needs/Goals (Stock Purchase Plan)
Explain Concept of Replacement Ratio in terms of creating Retirement/Disability Plans
(Mod 1.5) - ✔✔Income from SS/Various Capital Accumulation Benefits should be taken
into consideration (all sources under comp package).
Define Protection-Oriented Benefits (Mod 1.5) - ✔✔Consist of Medical Expense Benefits,
Life/STD/LTD Insurance - protect against serious loss exposures that could spell
immediate financial disaster. As such, they have a relatively short probationary period
due to the need of immediate coverage.
Define Accumulation-Orientated Benefits (Mod 1.5) - ✔✔Consist of Pension Plans,
Profit-Sharing, Savings, 401K, etc...which reward an Employee for long service with an
Employer. Involve a longer probationary period since viewed as a reward - not a
disadvantage for long-term employees.
Impact of making a plan Contributory on Employee Participation (Mod 1.5) -
✔✔Impacts group as a whole - not everyone will elect due to cost. If participation is
mandatory in a contributory plan, may create employee relations problem.
Describe arguments of flexibility in designing employee benefit plans as it relates to
functional approach (Mod 1.5) - ✔✔Argument 1: More flexibility EE has, more likely he
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 4
Answers 100% Pass
Broad view of Employee Benefits (Mod 1.1) - ✔✔Considers Employee Benefits to be
virtually any form of compensation other than direct wages paid to Employees (Ex:
WC, Unemployment, State DI, SS, Vacation, Holidays, 401K/Retirement, Employer
share of Medical, Severance Pay, Child Care, etc..)
Narrow view of Employee Benefits (Mod 1.1) - ✔✔Any type of plan sponsored or
initiated unilaterally or jointly by Employees and Employers and engaged in providing
benefits that result from the employment relationship and that are not underwritten or
paid directly by the government; (Ex: Benefits excluded include those legally mandated
- WC, SS).
Impact of Labor Unions on Employee Benefits (Mod 1.2) - ✔✔Through Collective
Bargaining, Employee Benefit Plans have been impacted. In 1948, National Labor
Relations Board (NLRB) ruled in Inland Steel that the duty to bargain in good faith over
wages also included insurance and fringes (pension). In WW Cross & Co, NLRB ruled
wages included health and accident plan.
What is the Taft-Hartley Act? (Mod 1.2) - ✔✔Also called, Labor-Management Relations
Act, Taft-Hartley sets framework for good-faith collective bargaining over wages,
hours, conditions and terms of employment/employee benefits. Along with Internal
Revenue Code (IRC), they established the distinction between retirement and welfare
benefits and also provided regulatory framework for admin in a CBA (legislative basis
on which jointly trusteed benefit plans are founded).
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 1
,3 Examples of Tax Advantages of Employee Benefit Plans (Mod 1.2) - ✔✔1: Employer
Contributions are Tax Deductible
2: Employer Contributions are not considered income to Employees
3: Certain Retirement Benefits Accumulate Tax-Free until distributed.
Examples of Questions that should be addressed when creating benefit objectives (Mod
1.3) - ✔✔Ex: What benefits should be provided? Who should be covered? Should
Employees have options? How should plan be financed? How should plan be
administered? How should plan be communicated to Employees?
What is the Functional Approach to Employee Benefit Planning? (Mod 1.4) -
✔✔Application of a systematic method of analysis to an Employer's Total Employee
Benefits Program. It analyzes the organization's EBP as a whole in terms of its ability to
meet various employee's needs and to manage loss exposures within the overall
compensation goals and parameters.
Why is the Functional Approach appropriate when planning, designing and
administering Employee Benefits? (Mod 1.4) - ✔✔1: EE Benefits Significant Element of
EE Comp and are a Tax-Effective Way to Compensate
2: EE Benefit Represent Large Labor Cost, so ER's should effectively plan/cost-control
3: In the past, EE Benefits were adopted on piece-meal basis; helps to now fill
gaps/overlap
4: Systematic Approach to planning helps to keep the EBP current, competitive and in
compliance with updated requirements (ACA)
5: Benefits to be integrated properly together
Compare Compensation/Service Oriented Benefit Philosophy with the Needs-Oriented
(Mod 1.4) - ✔✔Compensation/Service: EBP comprised of primarily compensation,
service or both. Level of benefits tied to salary or pay levels/years of service
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 2
,Needs Orientated: Focuses on Needs of EE's and their dependents
Identify Steps in Applying Functional Approach (Mod 1.4) - ✔✔1: Classify EE/Dep
Needs & Objectives (in logical/functional categories)
2: Classify Categories of EE's to be protected
3: Analyze present benefits in terms of functional categories of needs/objectives,
persons to benefit, and regulatory requirements
4: Determine any gaps or overlap in benefits from all sources in terms of functional
categories of needs & the persons to be protected
5: Consider recommendations for changes
6: Estimate costs/savings from each recommendation
7: Evaluate alternative methods of financing for those recommended benefits (and
existing ben)
8: Consider other cost-saving techniques
9: Decide upon appropriate benefits and methods of financing as a result of analysis
10: Implement Changes
11: Communication Changes to Employees
12: Periodically re-evaluate EBP
Define Needs/Exposures covered under EBP (Mod 1.4) - ✔✔1: Medical Expenses
(EE/Dep)
2: Losses due to Disability (Short/Long Term)
3: Death (EE/Dep/Retirees)
4: Retirement Needs
5: Capital Accumulation Needs/Goals
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 3
, 6: Needs for Unemployment/Layoff/Termination
7: Needs for Financial/Retirement Counseling
8: Losses from property/liability exposures
9: Needs for Dependent Care Assistance
10: Needs for Educational Assistance (EE/Dep)
11: Needs for Custodial-Care Expenses (LTC)
12: Other Needs/Goals (Stock Purchase Plan)
Explain Concept of Replacement Ratio in terms of creating Retirement/Disability Plans
(Mod 1.5) - ✔✔Income from SS/Various Capital Accumulation Benefits should be taken
into consideration (all sources under comp package).
Define Protection-Oriented Benefits (Mod 1.5) - ✔✔Consist of Medical Expense Benefits,
Life/STD/LTD Insurance - protect against serious loss exposures that could spell
immediate financial disaster. As such, they have a relatively short probationary period
due to the need of immediate coverage.
Define Accumulation-Orientated Benefits (Mod 1.5) - ✔✔Consist of Pension Plans,
Profit-Sharing, Savings, 401K, etc...which reward an Employee for long service with an
Employer. Involve a longer probationary period since viewed as a reward - not a
disadvantage for long-term employees.
Impact of making a plan Contributory on Employee Participation (Mod 1.5) -
✔✔Impacts group as a whole - not everyone will elect due to cost. If participation is
mandatory in a contributory plan, may create employee relations problem.
Describe arguments of flexibility in designing employee benefit plans as it relates to
functional approach (Mod 1.5) - ✔✔Argument 1: More flexibility EE has, more likely he
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 4
