Substantial Owner Benefit Limitation
Definition of "Substantial owner benefit limitation"
Restriction on the benefit that owners and other highly compensated individuals may receive from a qualified pension or other employee benefits. The U.S. Tax Code requires that benefits under a qualified plan, and some other benefits, do not unduly favor a business firm's top hierarchy. The tax reform act of 1986 provides a uniform definition of "highly compensated" as an employee who either owned more than 5% interest in the business, received more than $75,000 in compensation, received more than $50,000 in compensation and was in the top 20% of employees as ranked by salary, or was an officer and received compensation greater than 150% of Section 415 defined contribution dollar amount.
Popular Insurance Terms
request by an insured for indemnification by an insurance company for loss incurred from an insured peril. ...
Form of state rating legislation that allows each property/liability insurer to choose between using rates set by a bureau or its own rates. Individual states regulate insurers and approve ...
1890 law prohibiting monopolies and restraint of trade in interstate commerce. The Sherman Act was strengthened in 1914 with amendments known as the Clayton Act that added further ...
Premiums paid with funds that are not borrowed from life insurance. It is important to ascertain the finance charges and the costs/benefits of such a transaction. ...
Arrangement, often funded by life insurance, to continue an employee's salary in the form of payments to a beneficiary for a certain period after the employee's death. The employer itself ...
Termination of a plan. Under federal tax law, a plan can only be terminated for reasons of business necessity. Otherwise, prior employer tax deductible contributions under the plan are ...
Amount of insurance remaining on a ceding company's books, net of the amount reinsured. ...
Actuarial procedure used to determine the annual rate of return at which annual benefits would have to be gained from the cash value life insurance policy in order to equal the annual ...
Maintenance of Social Security benefits at current dollar or percentage levels. Social Security benefits are indexed to the Consumer Price Index and rise in tandem with the Index. A benefit ...
Have a question or comment?
We're here to help.