Forty-five Year Rule
One of three ways vesting must occur in a pension plan under the employee retirement income security act of 1974 (ERISA). An employee is entitled to 50% of his or her benefits after 10 years of employment, or when the total years of service (at least 5) and the employee's age equal 45, whichever is the earlier achieved. After that, the employee is credited with 10% for each year of service for the next 5 years, whereupon 100% vesting is achieved. Under the TAX REFORM ACT OF 1986, this vesting rule will no longer be in effect for plan years after December 31,1988.
Popular Insurance Terms
Model state statute that governs terms for surrender of individual deferred annuities and cash value life insurance. This model, adopted by most states in the late 1970s and early 1980s, ...
Provision in a life insurance policy that protects its proceeds from the beneficiary's creditors. On payment, the beneficiary loses the protection of the spendthrift trust clause and the ...
Rule that prohibits the introduction into a court of law of any oral or written agreement that contradicts the final written agreement. For example, an insurance contract containing clauses ...
Several insurance companies under common ownership and, often, common management. ...
Risk management control device used to minimize accidents and injuries to employees resulting from an unsafe working environment. For example, potential cumulative trauma disorders losses ...
Defined contribution pension plan in which employer contributions are set under a collective bargaining agreement. It usually covers the employees of a number of firms and is administered ...
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Application of conventional terms and conditions to the reinsurance of a risk. Contrast with non-traditional REINSURANCE. ...
Coverage in the event of a marine loss. Marine loss is damage or destruction of a ship's hull and the ship's cargo (freight) as the result of the occurrence of an insured peril. Perils ...
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