Profit-sharing Plan
Definition of "Profit-sharing plan"
Arrangement by an employer in which employees share in profits of the business. To be a qualified plan, a predetermined formula must be used to determine contributions to the plan and benefits to be distributed, once a participant attains a specified age, becomes ill or disabled, severs employment, retires, or dies. When a profit-sharing plan is first installed, employees with considerable past service usually do not receive such credit. An advantage to an employer is that in low or no profit years, the business does not have to contribute to the plan, since contributions are voluntary and the Internal Revenue Code does not require a minimum contribution, as with a deferred benefit plan or a money purchase plan.
Popular Insurance Terms
Early type of no-fault automobile insurance developed by two law professors, Robert Keeton and Jeffrey O'Connell. Its basic premise is that for many accidents it is impossible to place the ...
Net profit of a business, less dividends. Reinvestment of retained earnings enables an insurance company to write more business from a stronger capital base. Contributions to retained ...
Pension plan participant's retirement benefit credited for prior years of recognized service with the employer prior to a specific date. ...
Theory developed in 1931 by H. W. Heinrich; states that an accident is only one of a series of factors, each of which depends on a previous factor in the following manner: accident causes ...
Under a general liability policy, a claim by an employer arising when an employee terminated by a supervisor without authority or just cause brings suit against the employer. Such a claim ...
List of injuries and diseases covered in a health insurance policy. Consumers are well advised to read and understand the definitions of injuries and diseases in a health insurance policy. ...
Damaged insured property in receipt by the insurance company resulting from abandonment and salvage, subrogation, and reinsurance. ...
Frequency of premium payment; for example annually, semiannually, quarterly, or monthly. ...
Observance of an event occurring on a repeated basis that leads one to believe that a certain probability is attached to the occurrence of that event. For example, if there are a red ball ...
Have a question or comment?
We're here to help.