Profit-sharing Plan
Definition of "Profit-sharing plan"
Arrangement by an employer in which employees share in profits of the business. To be a qualified plan, a predetermined formula must be used to determine contributions to the plan and benefits to be distributed, once a participant attains a specified age, becomes ill or disabled, severs employment, retires, or dies. When a profit-sharing plan is first installed, employees with considerable past service usually do not receive such credit. An advantage to an employer is that in low or no profit years, the business does not have to contribute to the plan, since contributions are voluntary and the Internal Revenue Code does not require a minimum contribution, as with a deferred benefit plan or a money purchase plan.
Popular Insurance Terms
Coverage provided for the insured's personal property in the event the insured incurs a loss resulting from theft, burglary, robbery, or malicious mischief, regardless of whether the loss ...
Provision of liability policies and the liability sections of package insurance policies, such as the personal automobile policy (pap), that pay medical expenses without regard to fault. ...
Coverage in the event an employee is kidnapped from an insured business's premises and forced to return to aid a criminal in a theft. ...
Pension funding agreement under which funds paid into a retirement plan are not currently allocated to purchase retirement benefits. The funds of one plan can not be commingled with funds ...
Method of underwriting by which one or a group of Lloyd's underwriters write business on behalf of a number of Lloyd's syndicates and other insurance companies. Among the benefits of ...
Property or liability coverage that provides benefits (usually after a deductible has been paid by an insured) up to the limits of a policy, regardless of other insurance polices in effect. ...
Curve that results when yields on short-term treasury issues exceed those on long-term government debt. A widely accepted theory holds that when short-term and intermediate term issues are ...
Deleveraging of the insurance company's balance sheet. ...
Extension of coverage available under the Standard Fire Policy. The standard policy only covers the perils of fire and lightning. The endorsement covers riot, riot attending a strike, civil ...
Have a question or comment?
We're here to help.