Terminal Funding
Definition of "Terminal funding"
Former method of funding a pension plan. When employees retire, the employer sets aside a lump sum that will pay them lifetime monthly benefits. When determining the amount, these factors are considered life expectancy, the promised monthly benefit, and expected earnings on the sum set aside. The lump sum can either be placed in a trust fund or used to buy an annuity. Terminal funding, along with the current disbursement method, are no longer permitted for qualified pension plans under the employee retirement income security act of 1974 (erisa). ERISA requires current funding of future pension liabilities.
Popular Insurance Terms
Coverage on an all risks basis for the insured's own property as well as property of others under the insured firm's care, custody, and control. Exclusions are wear and tear, mysterious ...
Relationship between occupation of an insured and degree of risk in such coverages as life, health, and workers compensation. Some occupations are more risky than others; for example, a ...
Benefits provided to and obtained by those insured, while still alive. They include the annuity, cash surrender value, disability income, policy loan, and waiver of premium (WP). ...
Organization that develops and administers educational materials and examinations for life insurance agents. A significant objective of the courses is sales technique. ...
Coverage for damage or destruction of property with relatively high monetary value, such as stock brokerage house and bank shipments, which involve the transfer of securities and monies to ...
Plan that combines the simplicity and flexibility of the traditional profit-sharing plan with the best features of the defined benefit plan and the target benefit plan. By age-weighing the ...
Dividend in a participating policy paid after the death of an insured, representing dividends earned between the last dividend date and the insured's death. ...
Exclusion in property insurance eliminating coverage for damage or destruction of property due to insects. ...
Additional amount of life insurance above that provided by the employee benefit plan (standard group life plan) that may be chosen by the employee. A limit is usually placed on this maximum ...
Have a question or comment?
We're here to help.