CEBS GBA Exam Questions with 100% Correct Answers Latest
Graded A+
Question:
Broad view of Employee Benefits (Mod 1.1)
Answer:
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..)
Question:
Narrow view of Employee Benefits (Mod 1.1)
Answer:
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).
Question:
Impact of Labor Unions on Employee Benefits (Mod 1.2)
Answer:
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.
Question:
What is the Taft-Hartley Act? (Mod 1.2)
Answer:
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).
,Question:
3 Examples of Tax Advantages of Employee Benefit Plans (Mod 1.2)
Answer:
1: Employer Contributions are Tax Deductible
2: Employer Contributions are not considered income to Employees
3: Certain Retirement Benefits Accumulate Tax-Free until distributed.
Question:
Examples of Questions that should be addressed when creating benefit objectives (Mod 1.3)
Answer:
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?
Question:
What is the Functional Approach to Employee Benefit Planning? (Mod 1.4)
Answer:
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.
Question:
Why is the Functional Approach appropriate when planning, designing and administering
Employee Benefits? (Mod 1.4)
Answer:
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
,Question:
Compare Compensation/Service Oriented Benefit Philosophy with the Needs- Oriented (Mod 1.4)
Answer:
Compensation/Service: EBP comprised of primarily compensation, service or both. Level of
benefits tied to salary or pay levels/years of service
Needs Orientated: Focuses on Needs of EE's and their dependents
Question:
Identify Steps in Applying Functional Approach (Mod 1.4)
Answer:
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
Question:
Define Needs/Exposures covered under EBP (Mod 1.4)
Answer:
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
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)
Question:
Explain Concept of Replacement Ratio in terms of creating Retirement/Disability Plans (Mod 1.5)
Answer:
Income from SS/Various Capital Accumulation Benefits should be taken into consideration (all
sources under comp package).
Question:
Define Protection-Oriented Benefits (Mod 1.5)
Answer:
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.
Question:
Define Accumulation-Orientated Benefits (Mod 1.5)
Answer:
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.
Graded A+
Question:
Broad view of Employee Benefits (Mod 1.1)
Answer:
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..)
Question:
Narrow view of Employee Benefits (Mod 1.1)
Answer:
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).
Question:
Impact of Labor Unions on Employee Benefits (Mod 1.2)
Answer:
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.
Question:
What is the Taft-Hartley Act? (Mod 1.2)
Answer:
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).
,Question:
3 Examples of Tax Advantages of Employee Benefit Plans (Mod 1.2)
Answer:
1: Employer Contributions are Tax Deductible
2: Employer Contributions are not considered income to Employees
3: Certain Retirement Benefits Accumulate Tax-Free until distributed.
Question:
Examples of Questions that should be addressed when creating benefit objectives (Mod 1.3)
Answer:
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?
Question:
What is the Functional Approach to Employee Benefit Planning? (Mod 1.4)
Answer:
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.
Question:
Why is the Functional Approach appropriate when planning, designing and administering
Employee Benefits? (Mod 1.4)
Answer:
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
,Question:
Compare Compensation/Service Oriented Benefit Philosophy with the Needs- Oriented (Mod 1.4)
Answer:
Compensation/Service: EBP comprised of primarily compensation, service or both. Level of
benefits tied to salary or pay levels/years of service
Needs Orientated: Focuses on Needs of EE's and their dependents
Question:
Identify Steps in Applying Functional Approach (Mod 1.4)
Answer:
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
Question:
Define Needs/Exposures covered under EBP (Mod 1.4)
Answer:
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
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)
Question:
Explain Concept of Replacement Ratio in terms of creating Retirement/Disability Plans (Mod 1.5)
Answer:
Income from SS/Various Capital Accumulation Benefits should be taken into consideration (all
sources under comp package).
Question:
Define Protection-Oriented Benefits (Mod 1.5)
Answer:
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.
Question:
Define Accumulation-Orientated Benefits (Mod 1.5)
Answer:
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.
