GFOA Exam Prep LMS Training: Understanding Government Compensation and Payroll Flashcards
What principle guides the content of an Official Statement (OS) in municipal securities?
Materiality is the guiding principle, indicating the level and content of disclosure provided.
What role does pension obligation play in an issuer’s Official Statement?
Pension obligation disclosure should reflect its potential impact on the issuer’s ability to make bond payments.
What does NABL stand for?
National Association of Bond Lawyers.
What year did NABL issue guidance on pension funding obligations disclosure?
May 2012.
What is a Defined Benefit (DB) pension plan?
Guarantees a set retirement benefit, with the employer assuming investment risk.
What is a Defined Contribution (DC) pension plan?
Employees contribute to their retirement funds, bearing the investment risk.
What is the significance of ‘materiality’ in the context of an OS?
Materiality determines the necessity and extent of information included in the OS.
How often should issuers review and update the actuarial services contract?
At least every five years.
What is a Section 218 Agreement with the SSA?
Allows for social security coverage under a state plan.
What does FICA stand for?
Federal Insurance Contributions Act.
What is the ‘regular’ rate of pay according to the FLSA?
An average of all compensation for a defined week or pay period.
How is overtime calculated under the FLSA?
1.5 times the ‘regular’ rate of pay for hours worked beyond the standard threshold.
What are the consequences of not adhering to FLSA overtime regulations?
Legal and financial penalties, including back wages and damages.
How does the Affordable Care Act (ACA) impact payroll processing?
Requires employers to provide specific levels of health benefits or face penalties.
What are the limits for retirement plan contributions set by the IRS?
Annually set by the IRS; affects tax treatments for contributions.
What benefits does COBRA provide to employees?
Temporary health coverage after employment ends.
Define the ‘vesting’ in pension and retirement plans.
The right of ownership to a retirement benefit after meeting certain criteria.
What is a Summary Plan Description (SPD)?
Describes plan benefits, essential for participant knowledge and compliance.
What impact does ERISA have on pension and retirement plans?
Sets standards for retirement and health benefit plan information disclosure.
What are the key components of a pension and retirement plan audit?
Ensures valuation accuracy and reasonableness of methods and assumptions.
How does the ‘Cadillac’ tax affect healthcare plans under the ACA?
Imposes a tax on high-cost healthcare plans to encourage cost control.
What is the role of an actuarial audit in pension plan management?
Verifies the quality and compliance of actuarial services.
How can governments address health care costs without reducing employee benefits?
Strategies include rebidding insurance contracts and promoting wellness programs.
What strategies can be used to mitigate the risks associated with layoff or reductions in force?
Consider service level impacts, employee morale, and potential cost savings.
What considerations should be taken into account when determining the level of disclosure about pension obligations in an OS?
Funding status, budget impact, legal restrictions, and trends material to investors.
What are some techniques for reducing personnel costs in the near term?
Vacancy control, overtime monitoring, and addressing health care costs.
How can vacancy control help manage personnel costs?
Ensures staffing does not exceed budgeted positions, controlling personnel costs.
What is the purpose of conducting eligibility audits in relation to healthcare benefits?
Identifies ineligible dependents, reducing unnecessary health care expenditures.
Why might governments use comp time instead of paying overtime?
Offers flexibility and can reduce overtime costs, subject to policy restrictions.
What factors contribute to the need for more extensive disclosures about pension funding obligations in an OS?
Financial impact, revenue sources, legal constraints, and significant trends.
What benefits are considered ‘qualified’ under a Section 125 Cafeteria Plan?
Health, adoption, dependent care benefits, among others, on a pre-tax basis.
How do Defined Benefit and Defined Contribution plans differ in terms of employer risk?
DB plans guarantee benefits with employer risk; DC plans offer portability with employee risk.
What are some examples of non-taxable fringe benefits?
Examples include employer-provided cell phones and qualifying meals.
Why is the demographic diversity of state and local public finance a strength?
Enhances recruitment and mirrors public sector diversity.
What challenges are associated with procuring actuarial services for OPEB?
Consider qualifications, experience with health benefits, and compliance requirements.
What are ‘deferred retirement option plans’ (DROPs), and what is GFOA’s recommendation regarding them?
Discourages their inclusion in benefit plans due to cost and sustainability concerns.
Why is it recommended to conduct actuarial audits at least every five years?
Ensures actuarial work quality and plan’s fiscal health.
How does the ‘silver tsunami’ impact state and local public finance?
Increases workforce turnover and strains talent pipelines.
What role does USERRA play in military leave for government employees?
Guarantees reemployment rights after military service.
What are the main reasons for tracking time in payroll processing?
Pay calculation, compliance, accountability, and internal service cost tracking.
What are the advantages and disadvantages of remote work policies?
Adjusts management planning, employee expectations, and IT infrastructure.
How does FMLA impact payroll processing and employee benefits?
Requires unpaid leave for specified conditions, affecting staffing and benefits.
What are the implications of not meeting IRS requirements for fringe benefits?
Taxable income adjustments and compliance with tax regulations.
Why is a payroll processing checklist important?
Ensures accuracy, consistency, and compliance in payroll processing.
What are the key findings from GFOA’s report on public finance jobs?
Demand exceeds supply, creating staffing challenges in public finance.
What strategies can governments employ to attract finance professionals?
Targeted recruitment, enhanced benefits, and highlighting public service importance.
What is the ‘Cadillac’ tax and how does it affect health care plans?
Taxes high-cost plans to reduce health care expenses and encourage cost-effective benefits.
What are the challenges and solutions for pension funding obligations disclosure?
Clarify the impact of pension obligations on financial health and bond creditworthiness.
Why is monitoring and reporting crucial in payroll management?
Facilitates effective payroll management and compliance with laws and regulations.
What are the benefits of tuition assistance programs, and how are they regulated?
Offers financial aid for education, subject to tax laws and organizational policies.
