Other Nonretirement Benefits and Cafeteria Plans

1
Other Nonretirement Benefits and Cafeteria Plans

• Chapters 16 and 17

2
Highly compensated employee

• 5 of stock
• y 99k
• y 66k and in top 20 of ees
• officer 59.4k

3
Payment for time not worked

• Vacation
• Holidays
• Personal Time off
• Reserve/National Guard
• Jury Duty
• Death in family
• Sabbatical leaves

4
Time off without pay/Family leave

• active military duty, maternity, illness of
  dependent
• Federal family leave bill 50 ees up to 12
  weeks in 12 month period, continue health coverage

5
Supplemental unemployment benefits plans

• Extra Cash payments
• Educational assistance books, fees, tuition
  taxable income for graduate and professional
  schools
• Moving expense
• Suggestion awards income taxable
• Service awards de minimus
• Productivity and safety achievement awards
• Holiday bonuses and gifts

6
Employer-provided services
7
Cafeteria Plans

• Rationale
• Ees seem to not appreciate benefit plans, as such
  plans grow
• set benefits are not utility maximizing

8
Permissible Cafeteria benefits

• medical expense, disability, AD D
• vacations
• qualified legal expense plan
• dependent care
• life insurance
• 401(k), but not other deferal of compensation
  plans no vacation carry-over.
• Cash

9
Benefit election prior to start of plan year

• unless change in family status, separate from
  service, ee stops required contribs, change in
  costs or coverage

10
Flexible spending accounts

• Problems
• changing legislation
• nondiscrim rules
• in loco parentis ees make bad decisions
• adverse selection