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The handbook of employee benefits: design, funding and administration.

The Handbook of Employee Benefits will be a valuable addition to the bookshelf of a specialist in employee compensation. Benefit plans--for example, paid leave items and employer-financed pensions and health and life insurance--are growing in both cost and complexity. Once regarded as "fringe benefits"--minor appendages to basic wages and salaries--they now commonly account for a fourth or more of expenditures on employee compensation.

Furthermore, their increased complexity is a major reason for the growing professionalization of compensation admiistration. Benefit plan administrators must have expertise in a variety of areas, including tax and insurance laws, actuarial principles, and investment planning. They must also be familiar with such specialized legislation as the Employee Retirement Income Security Act and the Age Discrimination in Employment Act. Additional complexities result from changes in the legislative framework. For example, in recent years benefit plans have been affected by the Economic Recovery Tax Act of 1981, the Tax Equity and Fiscal Responsibility Act of 1982, the Deficit Reduction Act of 1984, and the Retirement Equity Act of 1984.

The Handbook provides detailed discussions of the various issues involved in designing, funding, and administering employee benefit plans. Edited by Jerry S. Rosenbloom, Professor of Insurance at the Wharton School of the University of Pennsylvania, its 1,096 pages include 60 chapters grouped into eight parts: Environment of Employee Benefit Plans; Designing Employee Benefits--Death Benefits; Designing Employee Benefits--Health Related Benefits; Designing Employee Benefit Plans--Additional Benefits and Services; Designing Employee Benefit Plans--Retirement and Capital Accumulation Plans; Costing and Funding of Employee Benefit Plans; Administration of Employee Benefit Plans; and Issues of Special Interest in Employee Benefit Planning. Authors of the chapters include individuals with academic, actuarial, consulting, and legal backgrounds.

Despite its broad scope, the Handbook does not cover the gamut of employee benefits. Instead, it focuses on major benefit areas commonly financed through trust funds or the purchase of insurance policies, for example, retirement and capital accumulation plans and life, health, and disability insurance. Individual chapters also are devoted to several benefits whose current incidence is relatively low--property and liability insurance, legal service plans, and financial counseling. Except for limited coverage of sick leave, however, there is no analysis of paid leave items, such as vacations and holidays. Among other items given little or no mention are severance pay, supplemental unemployment benefits, employer-financed child care, and educational assistance.

The Handbook's treatment of individual benefits tends to concentrate on tax and other regulatory issues. Generally, less emphasis is given to data on the incidence of plan provisions. Although Internal Revenue Service requirements for integrating private pension and social security benefits are discussed, readers will receive only a sketchy indication of the extent of such integration and the relative popularity of alternative techniques to accomplish this result. Consequently, readers will find it helpful to use the Handbook in conjunction with publications reporting on the findings of statistical surveys of the incidence and provisions of employee benefit plans.

What type of reader is likely to use the Handbook? As implied by its title, this book is not recommended reading for an individual seeking a brief overview of the employee benefits area. It is designed for practitioners, such as a company's manager of employee benefits, who need a reference work containing intensive treatment of a broad range of benefits. The Handbook will also serve as a comprehensive textbook at the college or professional education level. Nevertheless, it is not a "do-it-yourself" guide to designing and administering benefit plans nor does it substitute for the services of actuaries, attorneys, and investment advisers.

Considering the rapidity of change in employee benefits, it is not too early to envision a second edition of the Handbook. What revisions might enhance the usefulness of the current version? The following suggestions are offered: (1) Incorporated material on funding th rough salary reduction arrangements in the chapter on cafeteria approaches to benefit planning; (2) Give greater prominence to collectively bargained employee benefit plans; (3) To provide perspective on current practices, include information on the historical development of employee benefits, either in a separate introductory chapter or in the discussion of individual benefits; and (4) To aid readers seeking additional information, append bibliographies to the individual chapters. (A bibliography does follow the present edition's two chapters on employee stock ownership plans.)
COPYRIGHT 1985 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1985 Gale, Cengage Learning. All rights reserved.

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Author:Sheifer, Victor J.
Publication:Monthly Labor Review
Article Type:Book Review
Date:Jul 1, 1985
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