Personal Finance

Financial Planning

Questions:In your opinion, what are the most important

benefits an employer can offer?Would you accept a full-time job where

benefits were not offered? Why or why not?Should the government have the right to

dictate whether or not employers offer benefits?

IntroductionBenefits: forms of employee compensation in

addition to paySome required by law

UnemploymentSocial Security and Medicare

Others are optional

Profit SharingEmployee receives a portion of company

profitsIncentive Pay

Motivation to work harderLinks company profits to employee pay

Paid Vacations & HolidaysPaid as usual while on vacationPaid Holidays

Usually paid more than regular wages if workUsually applies to full-time employees

Employee ServicesExtras to improve morale and working

conditionsCompany discountsSocial and recreation programsDay care centersTuition reimbursement

Child Care and Sick PayPay child care expensesPaid on days you are sick

Generally for full-time employeesMay carry over year-to-yearMay not earn until you have worked a year first

Leave of AbsenceTemporary leave job for life events

Family Medical Leave Act (FMLA) Care for self or immediate family member Up to 12 weeks Unpaid Benefits stay intact

Job Security Return to same or equal position

InsuranceMost large companies provide insurance

plansMay pay for all or some of insurance cost

PremiumsPayments made in advance in order to have

insurance coverage

Health InsuranceDeductible

Amount an employee pays before insurance kicks inCo-pay

The portion of a bill that you pay AFTER deductible is paid

Most medical bills are paidFewer employers offering health insuranceTypes of insurance

Group Health InsuranceIndividual Health InsuranceCOBRA

Dental & Vision InsuranceDental

Routine exams usually covered 100%Braces often not includedMay have a small deductible

Vision Covers prescriptions and eye examsFrames usually not covered

Life InsurancePurpose: provide income when a wage

earner diesBeneficiary: person who receives the cashPolicy may end if you leave the job

Bonuses and Stock OptionsBonuses

Incentive paySigning bonusHoliday bonus

Bonus amounts tied to profits

Stock OptionsAllows you to buy shared of stock at a

discounted price

Pension PlansTraditional Pension Plan: employer provides

money to an employee during retirementBased on salary and years of serviceVested: entitled to full benefit

Employer Savings PlansEmployee pays most of the amountExample: 401K

Flexible Spending AccountAlso known as a “flex plan”Money taken out of paycheck pre-taxMoney put into an account to be used for

qualifying medical expenses and child care expenses

Maximum $5,000 Use it or lose it

How flex plans work?

Source: www.flexcorp.com/pages/serv_savings.htm

Source: www.flexcorp.com/pages/serv_savings.htm