PHR Compensation and Benefits 3 — Questions and Answers
Question 1: The Equal Pay Act of 1963 prohibits pay differences based on sex for jobs requiring equal skill, effort, responsibility, and:
- Working conditions (Correct answer)
- Education level
- Years of service
- Job title
Correct answer: Working conditions
The Equal Pay Act compares jobs on skill, effort, responsibility, and working conditions.
Question 2: Which defined benefit pension plan funding insurance is provided by a federal agency?
- PBGC (Correct answer)
- FDIC
- NCUA
- SIPC
Correct answer: PBGC
The Pension Benefit Guaranty Corporation (PBGC) insures defined benefit pension plans.
Question 3: A 401(k) plan that automatically passes nondiscrimination testing by meeting minimum contribution and vesting requirements is called a:
- Safe harbor plan (Correct answer)
- Cash balance plan
- Money purchase plan
- Top-hat plan
Correct answer: Safe harbor plan
Safe harbor 401(k) plans avoid ADP/ACP testing by satisfying set contribution and vesting rules.
Question 4: Point-factor job evaluation is an example of which type of evaluation method?
- Quantitative (Correct answer)
- Ranking
- Classification
- Market pricing
Correct answer: Quantitative
Point-factor assigns numeric points to compensable factors, making it a quantitative method.
Question 5: Which incentive plan pays employees a share of cost savings achieved through improved productivity, often via the Scanlon or Rucker formula?
- Gainsharing (Correct answer)
- Profit sharing
- Stock options
- Spot bonuses
Correct answer: Gainsharing
Gainsharing rewards groups for productivity gains and cost savings using formulas like Scanlon and Rucker.
Question 6: An employee benefit that allows pre-tax dollars to be set aside for qualified medical expenses, with a 'use-it-or-lose-it' rule, is a:
- Flexible Spending Account (FSA) (Correct answer)
- Health Savings Account (HSA)
- Health Reimbursement Arrangement (HRA)
- Defined contribution plan
Correct answer: Flexible Spending Account (FSA)
FSAs use pre-tax dollars for medical expenses and generally forfeit unused funds at year-end.
Question 7: The minimum standards for participation, vesting, and fiduciary conduct in private retirement plans are set by:
- ERISA (Correct answer)
- COBRA
- FLSA
- ADEA
Correct answer: ERISA
ERISA establishes participation, vesting, funding, and fiduciary standards for private benefit plans.
PHR Compensation and Benefits 3
The Equal Pay Act of 1963 prohibits pay differences based on sex for jobs requiring equal skill, effort, responsibility, and: