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Other Nonretirement Benefits and Cafeteria Plans

Other Nonretirement Benefits and Cafeteria Plans. Chapters 16 and 17. Highly compensated employee. >5% of stock y>= $99k y>= 66k and in top 20% of ees officer > 59.4k <10% ees are key. Payment for time not worked. Vacation Holidays Personal Time off Reserve/National Guard Jury Duty

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Other Nonretirement Benefits and Cafeteria Plans

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  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 • <10% ees are key

  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

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