Employee Retirement Income Security Act Of 1974 (erisa)
Definition of "Employee retirement income security act of 1974 (erisa)"
Law that established rules and regulations to govern private pension plans, including vesting requirements, funding mechanisms, and general plan design and descriptions. For example, three ways of vesting were established: full vesting after 10 years of service (Cliff Vesting); five to fifteen year rule (at least 25% of benefits vest at end of 5 years of service, 5% each year during the next 5 years, and 10% each year during the next 5 years); and Rule of 45 (when employee's age and years of service add up to 45), 50% of the benefits must be vested with 10% additional vesting each year thereafter. Under the tax reform act of 1986, vesting requirements were changed to 100% vesting after 5 years of service or 20% vesting after 3 years of service, 40% at the end of 4 years of service, 60% at the end of 5 years of service, 80% at the end of 6 years of service and 100% at the end of 7 years of service. (These vesting requirements are effective as of January 1, 1989.)
Popular Insurance Terms
Exposure created by an individual acting as a host serving alcoholic beverages at no charge to persons already intoxicated, resulting in these intoxicated individuals causing property ...
Policy that pays benefits to an insured who becomes ill or injured, provided that documentation is offered to confirm the illness or injury. ...
Coverage on data processing equipment, data processing media (such as magnetic tapes, disks), and extra expense involved in returning to usual business conditions. The data processing ...
Same as term: Actuarial Science: branch of knowledge dealing with the mathematics of insurance, including probabilities. It is used in ensuring that risks are carefully evaluated, that ...
Existence of a financial need which permits in-service withdrawals of funds from a section 401 (k) plan or a section 403 (b) plan to pay tuition for post secondary education for a ...
New pension-accounting rule created by the Financial Accounting Standards Board. The objective of this rule is to clarify pension accounting so that investors, employers, and employees will ...
Ruling that is the most significant source for the valuation of closely held corporation capital stock critical to the close corporation plan. This ruling defines the fair market value as ...
Rejection by an insurance company of an application for a policy. ...
Model state law of the NAIC that stipulates minimum benefits that must be contained in the policy's 12 required provisions and 11 optional provisions. The most significant stipulations of ...
Have a question or comment?
We're here to help.