BU354 Lecture Notes - Lecture 5: Pension, Unemployment Benefits, Life Insurance
The Strategic Role of Employee Benefits
-Employee Benefits: indirect financial payments given to employees
-They may include supplementary health and life insurance, vacation, pension, education plans,
and discounts on company products
Government-Sponsored Benefits
a) Employment Insurance – a federal program that provides income benefits if a person is
unable to work through no fault of his/her own
b) Canada/Quebec Pension Plan – programs that provide three types of benefits:
• Retirement income
• Survivor or death benefits payable to the employee’s dependants regardless of age at time
of death
• Disability benefits payable to employees with disabilities and their dependants - benefits
are payable only to those individuals who make contributions to their plans and/or
available to their family members
c) Workers’ Compensation: Provides income and medical benefits to victims of work-related
accidents or illnesses and/or their dependants, regardless of fault
d) Vacations and Holidays
e) Leaves of Absence
f) Life Insurance: Virtually all employers provide group life insurance plans for their employees
• This is insurance provided at lower rates for all employees regardless of health or
physical condition
g) Supplementary Health-Care/Medical Insurance
• A deductible is the annual amount of health/dental expenses that an employee must pay
before insurance benefits will be paid
• Coinsurance is the % of expenses that are paid for by the insurance plan
h) Short-Term Disability Plans and Sick Leave Plans: Plans that provide pay to an employee
when he/she is unable to work because of a non-work-related illness/injury
i) Long-Term Disability
• Disability management is a proactive, employer-centred process that coordinates the
activities of
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Document Summary
Employee benefits: indirect financial payments given to employees. They may include supplementary health and life insurance, vacation, pension, education plans, and discounts on company products. Deferred profit-sharing plan a plan in which a certain amount of company profits is credited to each employee"s account, payable at retirement, termination, or death. When designing a pension plan, there are several legal and policy issues to consider: Vesting (provision that employer money placed in a pension fund cannot be forfeited) Portability (provision that employees who change jobs can transfer the lump-sum value of the pension they have earned to a locked-in rrsp or their new employer"s pension plan) Phased retirement: an arrangement whereby employees gradually ease into retirement by using reduced workdays and/or shortened workweeks. Supplemental employee retirement plans: plans that provide the additional pension benefit required for employees to receive their full pension benefit in cases where their full pension benefit exceeds the maximum allowable benefit under the income tax act.
