aPHR Compensation and Benefits 4

Question 1

What is the primary difference between a defined benefit plan and a defined contribution plan?

Accepted Answer

Defined benefit plans guarantee a specific retirement income

Answer

A defined benefit plan promises a specific monthly benefit at retirement, while a defined contribution plan specifies only the amount contributed, not the eventual benefit.

Question 2

Under FLSA, which of the following employees is most likely classified as exempt from overtime requirements?

Accepted Answer

A salaried marketing manager earning $60,000/year meeting duties tests

Answer

To be FLSA exempt, an employee must meet both the salary level test (currently $684/week) and a duties test for executive, administrative, or professional roles.

Question 3

Which short-term incentive plan distributes a share of profits to employees based on company financial performance?

Accepted Answer

Profit-sharing plan

Answer

Profit-sharing plans distribute a portion of company profits to employees, typically annually, based on the company's financial results.

Question 4

Pay compression most commonly occurs when:

Accepted Answer

New hire salaries approach or exceed those of longer-tenured employees

Answer

Pay compression happens when market rates for new hires rise faster than internal merit increases, narrowing the gap between new and tenured employee pay.

Question 5

Which tax-advantaged account is paired exclusively with a High Deductible Health Plan (HDHP) and allows funds to roll over year to year?

Accepted Answer

HSA (Health Savings Account)

Answer

An HSA can only be paired with an HDHP, and unlike FSAs, unused funds roll over indefinitely and are owned by the employee.

aPHR - Associate Professional in Human Resources Practice Test

aPHR - Associate Professional in Human Resources Practice Test

aPHR Compensation and Benefits 4