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
Representative of an insurance company in soliciting and servicing policyholders. An agent's knowledge concerning an insurance transaction is said to be the knowledge of the insurance ...
Methods of handling policyholder dividends. In a participating life insurance policy, dividends are paid to the policy owner according to which of the following options is selected: applied ...
Present value of a series of payments such that the first payment is due one period hence, the second payment two periods hence, and so forth. The continued payment is contingent upon the ...
Remedy imposed by a court of law, usually in the form of a monetary award, as compensation to the insured party for the civil wrong incurred. A civil action is initiated by the injured ...
part of the Model Uniform Life and Health Insurance Policy Provisions Law giving an insurer a time limit on contesting coverage for preexisting conditions or misrepresentation. This law, ...
In insurance, individual with rightful possession of an insurance policy, usually the policyowner. ...
One of the major underwriting organizations for insurance company pools insuring commercial aircraft liability exposure. ...
Allocation of monetary resources to equities. ...
(stop loss) amount over which a health insurance plan pays 100% of the costs in a percentage participation plan. Here, an insured shares costs with the insurer according to some ...
Have a question or comment?
We're here to help.