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
Present value computation of the accrued or projected benefits of a retirement plan. This computation is known as the actuarial valuation because it is based on probability (retirement ...
Principle of surplus distribution as the result of excess funds above the amount required to establish legal reserves. These excess funds are generated from three sources: mortality ...
Reinsurance broker for a primary company (the re-insured). This broker is paid commissions by the reinsurance company, just as an agent is paid commissions by an insurance company for ...
Provision by an employer for the economic and social welfare of employees. Generally include: pension plans for retirement; group life insurance for death; group health insurance for ...
Stipulations of the rights and obligations of an insured and an insurer under a policy. ...
Individual or other entity who owns an insurance policy. Synonymous with policyowner. ...
Failure to exercise proper care. Many property insurance policies exclude losses that result from negligence. Neglect is also the basis for many liability suits. If an injury can be ...
Coverage underwritten on members of a natural group, such as employees of a particular business, union, association, or employer group. Each employee is entitled to benefits for hospital ...
Total earned premiums minus total expenses and losses paid of the insurance company. ...
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