Top-heavy Plan
Definition of "Top-heavy plan"
Pension or other employee benefit plan that favors highly compensated employees or top executives or owners of a company. Prior to the tax reform act of 1986, there was no uniform definition of a "highly compensated" employee, but that law provides a specific definition that is used for qualified pension plans, 401 (k) plans, and some other employee benefits. An employee is considered highly compensated if he or she: (1) directly or indirectly owns more than a 5% interest in the company, (2) receives compensation from the company of more than $75,000, (3) is paid more than $50,000 and was among the top 20% of employees ranked by compensation, or (4) is at any time an officer and receives compensation that was more than 150% of the Section 415 defined-contribution dollar amount.
Popular Insurance Terms
Same as term Underwriting Gain Loss): profit ( deficit) that remains after paying claims and expenses. Insurers generate profits from underwriting and from investment income. Their chief ...
Income paid for a specified number of years from an annuity. ...
Intent to defraud. An insured is required to answer truthfully all questions on the application. The insurance company can void a contract if it would not have issued a policy had it known ...
Additional coverage to a property policy. Windstorms are not one of the standard covered perils. If an insured desires coverage for windstorms and hail, an endorsement is required. ...
Financial instrument established irrevocably for a minimum of 10 years, after which the principal reverts to the grantor upon termination of the trust. A key feature is that earnings from ...
Net cost of insurance with no markup to cover an intermediary's profit or expenses. An intermediary, such as a broker, sells an insurance product net; that is, there is no loading for his ...
Automatic right of an insured to renew a policy until a given date or age except under stated conditions. It is extremely important for the purchaser to review the conditions for renewal in ...
Method of terminating a split dollar life insurance policy in which the company transfers its interest in the life insurance policy to the insured employee. Through such a transfer, the ...
Oral or written statement that results in injuring the good name or reputation of another, causing that individual to be held in disrepute. ...
Have a question or comment?
We're here to help.