Terminal Funding
Definition of "Terminal funding"
Former method of funding a pension plan. When employees retire, the employer sets aside a lump sum that will pay them lifetime monthly benefits. When determining the amount, these factors are considered life expectancy, the promised monthly benefit, and expected earnings on the sum set aside. The lump sum can either be placed in a trust fund or used to buy an annuity. Terminal funding, along with the current disbursement method, are no longer permitted for qualified pension plans under the employee retirement income security act of 1974 (erisa). ERISA requires current funding of future pension liabilities.
Popular Insurance Terms
Attachment to a commercial package policy to cover counterfeit currency, depositor's forgery, employee dishonesty, and the loss of money, money orders, and securities by the insured ...
In some life insurance policies, provision that permits the beneficiary, upon the death of the insured, to receive not only the death benefit payable under the policy but also all premiums ...
number of people born as a percentage of the total population in any given period of time. ...
Same as term Burglary Insurance: coverage against loss as the result of a burglary. Found as part of the commercial package policy that has generally replaced the special multiperil ...
Early life insurance that provided benefits only to survivors who lived to the end of a certain period of time. In the mid-17th century, Lorenzo Tonti, an Italian, devised a scheme to raise ...
Insurance policy in force only after the insurance company approves the application. Today, most companies use the insurability conditional premium receipt. ...
Extremely aggressive behavior by an insurance agent to convince a prospect to purchase the insurance product without due regard for the prospect's ability to pay the premiums and/or needs ...
Plan established by the employer that permits the employee to defer pretax earnings into a specifically designated account. From this account, the employee may withdraw funds to pay ...
Clause in an insurance policy that describes the administration and submission of claims procedure. ...
Have a question or comment?
We're here to help.