This pension glossary is meant to help you understand commonly used pension terms. These are simplified pension definitions and do not replace or modify any definitions found elsewhere, such as laws, regulations, forms and instructions, or plan provisions.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Accrued Monthly Benefit (AMB) — The monthly pension amount that you have earned through your service with your company.
Annuitant — The person receiving a payment in annuity form.
Annuity — Periodic payments to a person, usually for life.
B
Beneficiary — A person designated by a pension plan participant to receive all or a portion of the pension benefit after the participant dies.
Benefit Offset — A reduction in a person's pension benefit because he or she owes money to the plan or is also receiving other benefits. Benefit offset rules are set by the provisions of the person's pension plan.
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C
Certain and Continuous — An annuity guaranteed to be paid for a specified number of years. If the annuitant dies prior to the specified number of years, his/her beneficiary will receive the annuity for the remaining years.
Credited Service (CS) — The total time that you spent working that counts toward your benefit. Credited service is most often the number of years you worked for the company, up to the date of plan termination, or the date of plan freeze, whichever is earlier. It could be less for certain plans and for people who worked part-time.
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D
Date of Plan Termination — The date a pension plan ended.
Date of Trusteeship — The date that the Pension Benefit Guaranty Corporation (PBGC) takes over the management of your pension plan and its assets and becomes responsible for making payments to plan participants.
Defined Benefit Pension Plan — A pension plan that promises participants a specified monthly benefit at retirement.
Distress Termination — A company-initiated termination of a defined benefit pension plan when the company is in financial difficulty, continuing the plan would likely force the company to shut down, and the pension plan does not have enough assets to pay all current and future benefits.
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E
Employee Retirement Income Security Act (ERISA) — The federal law that establishes the basic requirements for employee benefit plans. The authority for administering and enforcing ERISA is divided among three federal agencies: The Internal Revenue Service (IRS), the Department of Labor (DOL), and the Pension Benefit Guaranty Corporation (PBGC).
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F
Fiduciary — With regard to a pension plan, a person or organization with control over the plan or its assets.
Flat-Rate Premium — The premium rate plans pay annually to PBGC for each plan participant. The rate is different for multi employer plans versus single-employer plans.
Fully Funded — A pension plan with sufficient assets to pay all current and future benefits.
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I
Involuntary Termination — A PBGC-initiated termination of an under funded defined benefit pension plan.
J
Joint-and-Survivor Annuity — An annuity paying one individual for his or her life and then providing for an annuity for the person's surviving spouse, usually in a reduced amount.
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L
Lump Sum Payment — When a participant receives a benefit all at once, not in regular installments.
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M
Maximum Guaranteed Benefit — Under the law, the largest monthly amount PBGC can pay a participant from its funds.
Multi-employer Plan — A pension plan set up by collectively bargained agreements involving more than one unrelated employer, generally in one common industry.
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P
Participant — A person who is or may become eligible to receive a benefit from a pension plan.
PBGC — The Pension Benefit Guaranty Corporation, a federal government agency that insures private defined benefit pension plans.
Pension Benefit — A benefit payable as an annuity to a participant or beneficiary of a pension plan.
Plan Administrator — The person, committee, or company designated by a pension plan to manage the plan's daily business.
Plan Sponsor (multi-employer plan) — The board of trustees that oversees a multi employer pension plan.
Plan Sponsor (single-employer plan) — An employer that establishes or maintains a pension plan for its employees.
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Q
Qualified Domestic Relations Order (QDRO) — A court order, usually in a divorce case, that meets legal requirements for awarding some or all of a participant's pension benefits to the participant's spouse, former spouse, child, or other dependent.
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S
Single-Employer Plan — A pension plan sponsored by a single employer or a group of companies under common control. (Also, a pension plan sponsored by unrelated companies that is not collectively bargained.)
Single Life Annuity — Periodic payments for the life of the participant with no benefits payable after the participant's death.
Standard Termination — Termination of a plan that has enough assets to pay for all benefits.
Surviving Spouse — The living spouse of a deceased participant. (A Qualified Domestic Relations Order (QDRO) may treat a participant's former spouse as a surviving spouse.)
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T
Termination (for single-employer plans) — When a pension plan ends.
Trustee — A person or organization with a duty to receive, manage, and disburse the assets of a plan.
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U
Under funded Plan — A pension plan without enough assets to pay all benefits.
Unfunded Benefit Liabilities — The amount of promised pension benefits that exceeds a plan's assets.
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V
Variable-Rate Premium (single-employer plans) — Additional premium amount, based on the amount of the plan's unfunded benefit liabilities, that an under funded plan or its sponsor must pay to PBGC.
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This glossary is taken word-for-word from the web site of the Pension Benefit Guarantee Corporation, a U.S. government agency. The original glossary page can be found here: http://www.pbgc.gov/glossary.htm. |
