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
Regulation set forth by the national association of insurance commissioners (naic) to govern life insurance sales illustrations. Includes the following major provisions: POLICY OWNER must ...
Part of a marine cargo policy that exempts the policyholder from vouching for the seaworthiness of the vessel. For example, while a purchaser of hull marine insurance warrants that a ship ...
Coverage in which premiums are collected monthly on an ordinary life insurance policy. ...
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 ...
Classification of occupations according to the degree of risk inherent in that occupation. ...
Analysis of uncertainty of financial loss. This classification can be according to whether a risk is fundamental, particular, pure, speculative, dynamic, or static. In life insurance the ...
Provision in the Federal Tax Code for favorable treatment of an estate. Under the unlimited marital deduction no federal estate tax is imposed on qualified transfers between a husband and ...
Benefits payable under any insurance policy or annuity contract. ...
Plan under which life insurance is substituted for retirement income. Under the plan, a married individual selects a single life annuity payout from the pension plan, which will generate ...
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