how to respond to the following discussion :"Cafeteria benefit plans" is a section 125 plan that allows employees to convert their taxable benefits such as salaries into nontaxable benefits. What are the pros and cons of this? Pros Employees will pay less taxes because section 125 allows for a portion of your salary to be non-taxed and set aside to pay for nontaxable benefits. Because employees will not be taxed on these "cafeteria benefits", they will have more money for out-of-pocket expenses. Employers will also pay less in taxes because they will not have to pay FICA or FUTA taxes on the employee's wages that were set aside for benefits. Cons Establishing a section 125 plan comes with set up fees. This might be a concern for businesses with cashflow problems but in the long run, it is smart to invest in a plan such as section 125. Doing so will save the business money in the future. Employees who decide to use a section125 plan must use the money during the year of the plan otherwise the set aside funds will expire. "Cafeteria benefits" sometimes can be in the form of a flexible spending account. Which means employees must