403(a) Annuity Plan
Definition A qualified retirement plan that is invested in annuities. Often referred to as a qualified annuity plan. Referring Cite IRC § 403(a) Additional Helpful Information
Qualified plan
A retirement savings plan provided by an employer, that satisfies benefits and account requirements. Examples include 401(k)s and pension plans.
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Stock Bonus Plan
Definition An employer-sponsored qualified-retirement-plan established by an employer for the benefit of his employees and their beneficiaries. Stock bonus plans are defined contribution plans, funded with
Graded Vesting
Definition Vesting according to a schedule where the participant is vested at a percentage amount (that is less than 100%) each year until he/she accrues
Frozen Plan
Definition A qualified plan which has been amended to discontinue contributions and benefit accruals, but assets have not been distributed to participants or their beneficiaries.
Family Member Aggregation
Definition Rule that required a highly compensated employee who is a 5-percent owner or one of the ten most highly compensated employees and any family
Cliff vesting
Definition Vesting according to a schedule where a participant becomes immediately 100% vested after accruing a number of years of service, as opposed to a
Bad-Boy Clause
Definition A provision in a qualified plan, under which a participant would lose – usually unvested– benefits, if the participant engages in dishonest activity such
Individually Designed Plan
Definition Qualified plan or SEP, where the plan document and adoption agreement are customized for a particular employer. An employer that amends any provision of
Vesting
Definition The process by which participants gain ownership (or nonforfeitable rights) in employer contributions made to employer sponsored plans. Certain contributions are always immediately 100%
Vesting Schedule
Definition The timetable by which participants become vested in employer contributions made to employer sponsored plans. Employer contributions to certain plans cannot be placed on
