Answering Diversified Exam Questions - Assignment Example

One of the fundamental reasons why workers would prefer the pay as you go unfunded pension plans to the private pension plans is due to the cost burden associated with the private pension plan The Pay as you go pension plan offers provisions that allow a regular deduction of a specified amount from the worker’s salary. This would enhance a long-run cost benefit to the workers. Private pension plans also do not have any subsidy and; therefore, the workers may not prefer it.

The benefit planners ought to understand the statutory laws provided in the various sources to facilitate an effective plan design and management within the various sectors. Statutory laws are essential to the benefit planners since they are the basis of all other rules, court cases, and regulations affecting the planners.

The internal revenue code is one of the sources of statutory laws in the benefits area. This involves the taxation that pertains to the number of deductibles and taxation pensions to the employee benefit programs. This is essential in the determination of the number of funds deductible from the different employees. It contributes to the pay-as-you-go pension plans. Security laws are another statutory law in the benefits area. It involves the protection of the investors. This benefit plan is essential in the protection of the amount of money that the employees have. It is, therefore, essential in ensuring the protection of the employee’s excess funds placed forwards as investments. Civil rights laws are also a given law designed for the statutory sectors. This part of the employee compensation policies prohibits different discriminatory elements in employment. This is essential in enhancing fair employment practices during operations. Employee Retirements Income Security Act also affects the benefit planners. This involves the provisions set aside to safeguard the employees’ funds set aside for future benefits. This act ensures protection against fraudulent actions on employee benefit funds.

Mr. Miller’s illness falls under critical illness. By medical diagnosis, to the extent that Mr. Miller has been bedridden for the last three months and does not take solid food, he must behave been diagnosed with histological conformation shown by the rapid growth of malignant cells and invasion of tissues of the digestive system. Insurance policies treat these conditions as critical illnesses.

The liability, in this case, may be less incentive on the side of Penny as compared to Richie due to the circumstance of activity involved in the use of the automobiles. The automobile used by Richie would require a high incentive in purchasing liability insurance because the activity involved like drag racing portrays the user of the automobile to a high risk of accidents and dangers related to automobile activities. The incentive involved in the purchase of liability insurance depends on the level of risks of occurrence of a given negative result.