CPFO Compensation & Benefits Exam Questions with Complete Answers Latest Update 2024
Step and grade compensation model - Answers -Civil Service Model
-Different grades and steps within each grade
-Steps may be spaced out with incremental pay increases
Key component of position control - Answers -Vacancy adjustments, inflation impacts, and
compensation approaches are all key components of and effective budgeting of salary and wages.
Budgeting of salary and wages - Answers -Salaries and wages are largest portion of expenditure budget.
-Need for accurate expenditure projections
-Manage headcount levels in light of cost constraints
Collective bargaining and compensation - Answers -Track positions covered by collective bargaining
agreements.
-Be aware of key dates
-More than salary, some agreements address overtime, holiday pay, shift differentials, uniform
allowances, and license/certification pay.
Employer compensation costs landscape (Private vs. Public) - Answers Employer costs are higher per
hour in public sector than in private.
FICA - Answers Federal Insurance Contribution Act - A US federal payroll tax that is deducted from each
paycheck.
Social Security and Medicare
Fringe benefit - Answers Any financial extras beyond the regular pay - retiree health insurance, retiree
pension, company car, subsidized meals, bonuses. Tuition reimbursement is no considered de minimis.
Limit before taxable is $5,250
Longevity of service - Answers Length of service
Employer-provided tuition assistance - Answers -Full or partial reimbursement or loan.
-Policy must be tax compliant.
-Consider some type of repayment if employee terminates
-Not considered de minimis fringe benefit.
, Paid Time Off (PTO) - Answers -Set number of days to be used by employee for time off, either sick or
vacation.
-Discourages people from accruing significant sick leave banks.
Merit pay model - Answers -Pay for performance system
Portable retirement plan - Answers -Defined contribution plan
-Retirement plan benefit is attached to the individual employee and not the employer.
FSLA Non-discretionary bonus - Answers -Included in the regular rate of pay, unless qualified as
excludable under another statutory provision.
-Employees know about, understand how to earn, and expect the bonus.
-Employer still has the option not to pay the bonus.
Importance for employer to track employee time - Answers -Determine how much to pay
-Determine leave time accrual and deductions
-Promote a culture of accountability
-Time entry options:
Electronic time cards, paper-based timecards, electronic time entry
Employees carryover vacation balance - Answers Policies that define timing of accruals and year to year
carryover of balances can have significant budgetary impacts.
Section 218 (int the Social Security Act) agreement - Answers A voluntary yet irrevocable agreement
between a state and the Social Security Administration and/or Medicare Hospital Insurance that the
state will provide these benefits (not the federal government) to certain state and local government
employment.
IRS Form 941 - Answers Payroll tax form filed quarterly to report and pay federal payroll taxes, including
Social Security Tax and Medicare.
FSA accounts - Answers Health Care FSA, Limited Expense Health FSA and Dependent Care FSA
Qualifying life event
-employment status
-legal marital status
-number of dependents
Step and grade compensation model - Answers -Civil Service Model
-Different grades and steps within each grade
-Steps may be spaced out with incremental pay increases
Key component of position control - Answers -Vacancy adjustments, inflation impacts, and
compensation approaches are all key components of and effective budgeting of salary and wages.
Budgeting of salary and wages - Answers -Salaries and wages are largest portion of expenditure budget.
-Need for accurate expenditure projections
-Manage headcount levels in light of cost constraints
Collective bargaining and compensation - Answers -Track positions covered by collective bargaining
agreements.
-Be aware of key dates
-More than salary, some agreements address overtime, holiday pay, shift differentials, uniform
allowances, and license/certification pay.
Employer compensation costs landscape (Private vs. Public) - Answers Employer costs are higher per
hour in public sector than in private.
FICA - Answers Federal Insurance Contribution Act - A US federal payroll tax that is deducted from each
paycheck.
Social Security and Medicare
Fringe benefit - Answers Any financial extras beyond the regular pay - retiree health insurance, retiree
pension, company car, subsidized meals, bonuses. Tuition reimbursement is no considered de minimis.
Limit before taxable is $5,250
Longevity of service - Answers Length of service
Employer-provided tuition assistance - Answers -Full or partial reimbursement or loan.
-Policy must be tax compliant.
-Consider some type of repayment if employee terminates
-Not considered de minimis fringe benefit.
, Paid Time Off (PTO) - Answers -Set number of days to be used by employee for time off, either sick or
vacation.
-Discourages people from accruing significant sick leave banks.
Merit pay model - Answers -Pay for performance system
Portable retirement plan - Answers -Defined contribution plan
-Retirement plan benefit is attached to the individual employee and not the employer.
FSLA Non-discretionary bonus - Answers -Included in the regular rate of pay, unless qualified as
excludable under another statutory provision.
-Employees know about, understand how to earn, and expect the bonus.
-Employer still has the option not to pay the bonus.
Importance for employer to track employee time - Answers -Determine how much to pay
-Determine leave time accrual and deductions
-Promote a culture of accountability
-Time entry options:
Electronic time cards, paper-based timecards, electronic time entry
Employees carryover vacation balance - Answers Policies that define timing of accruals and year to year
carryover of balances can have significant budgetary impacts.
Section 218 (int the Social Security Act) agreement - Answers A voluntary yet irrevocable agreement
between a state and the Social Security Administration and/or Medicare Hospital Insurance that the
state will provide these benefits (not the federal government) to certain state and local government
employment.
IRS Form 941 - Answers Payroll tax form filed quarterly to report and pay federal payroll taxes, including
Social Security Tax and Medicare.
FSA accounts - Answers Health Care FSA, Limited Expense Health FSA and Dependent Care FSA
Qualifying life event
-employment status
-legal marital status
-number of dependents
