Amortization Method (or Fixed amortization method)
Definition One of the methods used to calculate substantially equal periodic payments (SEPP), also referred to as 72(t) payments. Under the fixed amortization method, the
401K
A tax-deferred employer-provided retirement savings account, to which eligible employees may defer part of their salary. Salary deferral can be pre-tax or post-tax include Roth 401(k)s.
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Annuitant
Definition The person who receives annuity payouts from an annuity product. Payouts are usually based on this person’s life expectancy. Referring Cite IRS Publication 575,
Annual Benefit
Definition A benefit which is payable annually in the form of a straight life annuity under a defined benefit plan. Such benefit does not include
Amendment
Definition The act of making updates or changes to a plan’s provisions, features and/or benefits. Some amendments are required by law, whereas others are done
Alternate Payee
Definition Any spouse, former spouse, child or other dependent of a plan participant who is recognized by a domestic relations order (DRO) as having a
Age 59 ½
Definition 6-months after the 59th anniversary of an individual’s date-of-birth. The significance of age 59 ½ is that distributions taken as of that age are
After-tax contributions
Definition Contributions made to a participant’s retirement account from assets that have already been subject to income tax. For Traditional IRAs, these are referred to
401K
What is a 401K adoption agreement?
What is a 401K adoption agreement? 401k adoption agreement is a section of a retirement plan document that allows the employer to choose the provisions
ADP Test (Actual Deferral Percentage Test)
Definition A test that must be performed by plan administrators to determine whether salary deferral contributions to a SARSEP or 401(k) plan discriminate in favor
ACP (Actual Contribution Percentage )Test
Definition A test that must be performed by plan administrators to determine whether matching and after-tax contributions are skewed in favor of highly compensated employees