Glossary: Pension Terms
By: Source: AARP Bulletin Today Date Posted: 2003-11-05 13:51:00-05:00
defined-benefit pension plan—a pension plan that promises participants a specified monthly benefit at retirement.
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).
fully funded—a pension plan with sufficient assets to pay all current and future benefits.
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.
lump-sum payment—a benefit paid all at once, not in regular installments.
Pension Benefit Guaranty Corporation—a federal government agency that insures private defined-benefit pension plans.
single life annuity—an annuity providing periodic payments for the life of the participant only, with no benefits payable to a surviving spouse or other family members after the participant's death.
underfunded plan—a pension plan without enough assets to pay all current and future benefits.
Definitions provided by the Pension Benefit Guaranty Corp.
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