Maximum Deductible Contribution
Definition of "Maximum deductible contribution"
Limit allowed by law on employee salary reduction plans. Many pension plans, as well as the popular 401 (k) plan, allow employees to set aside pre-tax dollars in a company-sponsored retirement account, often matched by a company contribution. But the amount contributed by the employee is regulated by law. For example, the maximum annual contribution for the 401 (k) plan, which was $30,000 per year in 1986, was reduced to $7000 by the TAX REFORM ACT OF 1986.
Popular Insurance Terms
Pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds of one plan can not be commingled with funds ...
Fund established to pay specified losses, usually the low severity property losses. This type of account is an excellent device in conjunction with a self-insurance plan, in which the fund ...
Professional designation earned after the successful completion of five national examinations given by the insurance institute of America (IIA). Covers such areas of expertise as accident ...
Same as term Cost-Of-Living Adjustment: automatic adjustment applied to Social Security retirement payments when the consumer price index increases at a rate of at least 3%, the first ...
under contract law, anything of value exchanged for a promise or for performance that is needed to make an instrument binding on the contracting parties. adherence to all provisions of an ...
Standard set under the occupational safety and health act that sets allowable levels of worker exposure to such toxic substances as asbestos, certain chemicals, and radiation. In many cases ...
Provision that the equity of an insured in a life insurance policy cannot be forfeited. There are four benefits a policyholder can select under the option: cash surrender value, extended ...
Arrangement between the seller and the buyer in which the buyer has the right to buy (call option) or sell (put option) a security at some time in the future at a price stipulated at ...
Legislation that provides support for legal actions against individuals or organizations involved in systematic illegal activities. This act has been applied against insurance organizations ...
Have a question or comment?
We're here to help.