Question

Employers frequently provide postretirement benefits to employees aside from pensions. Some of these benefits include health insurance, life insurance, and disability insurance. Choose one (health, life, or disability insurance) and explain the similarities and differences when accounting for this other benefit in addition to a pension. Which one would a company be most likely to select, or which one makes the most sense?

Answer 1

Introduction

In the madern era, companies have evolved themselves in the sence that they actively engage in tactics that help its employees. Previously, companies viewed their employees only as a cost.

With the emergance of human resource management, this rapidly changed and companies realized that satisfaction of employees was equally important in ensuring that the overall turnover ratios can be well managed and it also helps in increasing the revenue and output that they get from the employees

Case Specific

Pension is a payment which companies make post the person has retired and left the organization. Usually it is a specific amount after a specified number of years is in liaison with the current money which a person withdraws from an organization.

For this companies which provide pension plans and the ones in which people work deduct a certain amount form the actual salaries to provide such benefits respectively.

In my opinion a company is more likely to provide benefits such as health insurance along with pension. Other factors such as disability and life insurance are more prevelant in hazardous industries. But a general health insurance is followed by all companies and sectors a like

In the sence of accounting, insurance policies are seen by most governments as an investment and has certain tax rebate in most countries for both the employer and employee. Therefore each one ineed participates in the same ensuring that their total tax liability falls and at the same time, employees can get health cover for which otherwise they would have to pay a very high amount respectively.

In this regards compared to other conventional modes such as Pension and Provident Fund, companies are choosing health insurace over any other means, since it ensures that the companies can support employees in sound investing decisions which would make their lives easier in the future when they would have health problems to deal with respectively.

It is also a choice, since it maintains work life balance and aims at ensuring maximum employer welfare.