Pension Plan
Definition of "Pension plan"
Retirement program to provide employees (and often, spouses) with a monthly income payment for the rest of their lives. To qualify, an employee must have met minimum age and service requirements. Benefit formulas can be either the defined contribution pension (money purchase plan) or the defined benefit plan. The employee retirement income security act of 1974 (ERISA) requires a pension plan to provide an income for the rest of a retired employee's life, and at least 50% of that amount to the surviving spouse of a retired employee for the rest of her life, unless the spouse this right in writing. Death and disability benefits are also provided by most pension plans. The TAX REFORM ACT OF 1986 has changed the VESTING requirements. Funds for these plans can be generated under numerous PENSION PLAN FUNDING INSTRUMENTS.
Popular Insurance Terms
Same as term Fixed Dollar Annuity: annuity that guarantees that a specific sum of money will be paid in the future, usually as monthly income, to an annuitant. For example, a $1000-a-month ...
Statutory accounting principles (SAP), as listed in the insurance company's annual financial statements filed with the insurance commissioner of each state in which it is licensed. Income ...
Coverage for the expenses incurred by a business resulting from the recall of products, whether defective or not. ...
Measurement of the response of the cash flow of an insurance company to various interest rate scenarios; for example, how rising interest rates will affect the number of life insurance ...
Trust to which a donor transfers assets and that distributes income to finance a predetermined situation. After the trust expires, any remaining assets are donated to the qualified charity ...
Same as term: generally accepted accounting principles (GAAP): ...
Home office underwriter who evaluates risk based on probability, statistics, and medical knowledge. ...
State law that limits the admitted value of an insurance company's EDP equipment to 3% of the company's ADJUSTED SURPLUS. ...
Provision applied as a rider attached to an ordinary life insurance policy for the purpose of meeting estate planning requirements. When the insured dies, the beneficiary is entitled to ...
Have a question or comment?
We're here to help.