Glossary

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NUM

401(a)(9)
Tax code section requiring minimum distributions after age 70 ½.

402(g) limit
Test to ensure that the total of each participant’s elective deferrals has not exceeded the calendar year limit

415 Limit
Test to ensure that the total of each participant’s allocated contributions, including deferrals, and forfeitures for the limitation year (generally the same as the plan year) has not exceeded the annual additions limit.

A

ASPPA
The American Society of Pension Professionals & Actuaries or ASPPA is a national organization for career retirement plan professionals. The membership consists of the many disciplines supporting retirement income management and benefits policy.

C

COLA
An adjustment made to Social Security and supplemental security income in order to adjust benefits to counteract the effects of inflation. COLAs are generally equal to the percentage increase in the consumer price index for urban wage earners and clerical workers (CPI-W) for a specific period.

D

DEFRA ’84
Deficit Reduction Act of 1984. One portion of the Act was the Tax Reform Act of 1984 (TEFRA).

DFVCP
The Delinquent Filer Voluntary Compliance Program is designed to encourage voluntary compliance with the annual reporting requirements under the Employee Retirement Income Security Act (ERISA). Gives delinquent plan administrators a way to avoid potentially higher civil penalty assessments by satisfying the program’s requirements and voluntarily paying a reduced penalty amount.

DOL
The Department of Labor administers the non-tax (regulatory and administrative) provisions of ERISA. The Department issues opinion letters and other pronouncements, and requires certain information forms to be filed.

E

EBSA
The Employee Benefits Security Administration is an agency of the Department of Labor responsible for protecting the integrity of retirement plans, health plans and other employee benefits.

EESA
The Emergency Economic Stabilization Act is one of the bailout measures taken by Congress in 2008 to help repair the damage from the subprime mortgage crisis. The act gives the Treasury Secretary the authority to buy up to $700 billion of troubled assets and restore liquidity in financial markets.

EGTRRA
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)

EPCRS
The Employee Plans Compliance Resolution System is a comprehensive IRS correction program that allows plan sponsors to correct plan defects voluntarily.

ERISA
The Employee Retirement Income Security Act of 1974 is the basic labor law covering qualified plans and incorporates both the pertinent Internal Revenue Code provisions by reference and labor law provisions.

ERISA Bond
ERISA regulations require that all pension plans, including 401(k) plans, be insured by an "ERISA bond" which has a payout equal to 10% of plan assets, or $500,000 (maximum of $1,000,000), whichever is less. There is no difference between an ERISA bond, fiduciary and fidelity bonds. All three respond to claims involving dishonest acts on the part of asset investment advisors or the employer. The fidelity, ERISA and fiduciary bonds cover against losses due to a criminal act.

F

Fidelity Bond
ERISA regulations require that all pension plans, including 401(k) plans, be insured by an "ERISA bond" which has a payout equal to 10% of plan assets, or $500,000 (maximum of $1,000,000), whichever is less. There is no difference between an ERISA bond, fiduciary and fidelity bonds. All three respond to claims involving dishonest acts on the part of asset investment advisors or the employer. The fidelity, ERISA and fiduciary bonds cover against losses due to a criminal act.

G

GATT ’94
General Agreement on Tariffs and Trade Act (part of the Uruguay Round Agreements Act)

GUST ’94
Acronym used to refer to a collection of laws that changed some of the rules that apply to retirement plans GATT, USERRA, SBJPA and TRA of ’97.

H

HEART
The Heroes Earnings Assistance and Relief Tax. Amended the Internal Revenue Code of 1986 to provide benefits for military personnel, and for other purposes.

I

Internal Revenue Code
All federal tax laws. The Internal Revenue Code is found as Title 26 of the United States Code, a collection of all federal laws.

IRS
This is an agency of the Treasury Department, headed by the Commissioner of Internal Revenue, charged with enforcing the tax laws. Included in IRS functions are issuances of interpretations of the tax law, auditing of tax returns, and making criminal investigations.

J

JCWAA ’02
Job Creation and Worker Assistance Act of 2002.

O

OBRA ’86
The Omnibus Budget Reconciliation Act of 1987 contained provisions affecting the minimum funding standards in the section of the Act also known as the Pension Protection Act of 1987.

P

PBGC
Pension Benefit Guaranty Corporation - A nonprofit corporation, functioning under the jurisdiction of the Department of Labor, that is responsible for insuring benefits to participants of certain defined benefit plans. PBGC was created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of  private-sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum.

PPA 2006
The Pension Protection Act. Legislation signed into law on August 17 2006, for which the primary goal was to protect and enhance the retirement savings and pension provisions.

R

REA ‘84 (Retirement Equity Act)
The act that makes it mandatory for employees with spouses to be in receipt of retirement income from a pension plan in the form of a joint life and survivorship annuity, unless the employee's spouse waives that right in writing. This is to prevent the employee from writing the spouse out of the benefit income.

S

SBA of ‘96 (Small Business Jobs Protection Act of 1996)
Act which include provisions that provided tax relief for small businesses, protect jobs, and increased the take home pay of workers.

SCP
The Self Correction Program allows a plan sponsor that has established compliance practices and procedures the ability to self-correct insignificant operational failures at any time without contacting the IRS and without payment of any fee or sanction.

T

TRA ‘86 (Tax Reform Act Of 1986)
Sweeping revisions to the income tax laws, enacted by the United State Congress in 1986, that lowered tax rates and eliminated many tax shelters.

U

USERRA ‘94
(The Uniformed Services Employment and Reemployment Rights Act) protects service members' reemployment rights when returning from a period of service in the uniformed services, including those called up from the reserves or National Guard, and prohibits employer discrimination based on military service or obligation.

V

Voluntary Correction Program (VCP)
Used when a plan sponsor is under examination and qualification defects are discovered. In the program the plan sponsor and the IRS negotiate an appropriate settlement, typically resulting in larger sanctions than under the VCP program designed to handle the more common and less flagrant plan defects submitted to the IRS for review upon payment of a user fee.

W

WRERA
The Worker, Retiree, and Employer Recovery Act of 2008 provides a number of relief provisions for qualified plan sponsors and their beneficiaries and individual retirement arrangements. These include provisions for required minimum distribution relief for 2009, special rules for Roth-to-Roth rollovers, and expansion of rollovers for non spouse beneficiaries.