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
Qualified retirement plan under the internal revenue code Section 457 for employees of the states and political subdivisions within the states. ...
Coverage in the event an insured's negligent acts and/or omissions involving the construction of a new one- or two-family residential structure result in bodily injury and/or property ...
Policy used to provide the funds necessary for buy-and-sell agreements whereby an income payment or a series of income payments are paid to the buyer of the disabled partner's interest ...
Amount subtracted from an annuity or from mutual fund proceeds payable to an annuity owner or mutual fund owner to reflect expense fees described in the annuity contract or mutual fund ...
Factor considered in determining amount of life insurance to purchase in order that funds will be available to pay the emergency expenses following the death of a family member. ...
Pension plan format. After deciding how much to contribute, the employer can suspend, reduce, or discontinue contributions during the first 10 years only for reasons of business necessity; ...
Commission that is paid based on how profitable a particular type of business proves to be that is written by an agent. ...
Contractor's and Architect's Errors and Omissions Insurance, which also serves as a general liability policy for these professionals. ...
Attributes of a particular employee benefit plan. For example, a general characteristic of group life insurance is that the whole group is underwritten, not individual members. ...
Have a question or comment?
We're here to help.