chapter13
Cliff
5years
gradual vesting
7years
Pension Benefit Guaranty Corporation (PBGC)
A corporation that intervenes when the employer is unable to meet its obligations to retirees.
Fiduciary Duties
A number of important responsibilities held by the people or entities that control and manage benefit plans provide accurate information about benefit plans not withhold material facts that would likely affect the choices and interests of beneficiaries
Abuse of discretion standard
A standard used to determine if plan administrators abused their discretion by making decisions in an arbitrary and capricious manner.
Older Workers Benefit Protection Act (OWBPA)
An Act permitting employers to provide less extensive coverage for older workers so long as the amount spent to provide benefits to older workers is at least equal to the amount spent providing those benefits to other worker
Consolidated Omnibus Budget Reconciliation Act (COBRA)
An Act that requires that employers who have group health insurance plans and at least 20 employees offer continuation coverage to employees (and other beneficiaries if there is family coverage) who experience qualifying events that would otherwise cause the loss of their health insurance
Fiduciary
Anyone who exercises discretionary authority or control over the administration of a benefit plan or its funds
domestic partner benefits
Benefits that an employer chooses to offer to an employee's unmarried partner, whether of the same or opposite sex An employer wishing to implement a domestic partner program needs to create a definition of what an eligible domestic partner is
Prudent Man Duty
Requirement that a fiduciary must only invest funds entrusted to him/her as would a person of prudence (i.e., with discretion, care and intelligence)
U.S. v. Windsor
The Defense of Marriage Act (DOMA), enacted in 1996, states that, for the purposes of federal law, the words "marriage" and "spouse" refer to legal unions between one man and one woman. Since that time, some states have authorized same-sex marriage. In other cases regarding the DOMA, federal courts have ruled it unconstitutional under the Fifth Amendment, but the courts have disagreed on the rationale
Employees Retirement Income Security Act (ERISA)
The principal federal law regulating benefit plan.governs plans broadly not concerned with just pensions.covers most employer and labor union sponsored benefit plans but not government employer plans.social insurance program are not covered by erisa they are either pension plans or welfare plans. Inform Employees about Their Benefits Deliver on Promised Benefits Provide Claims and Appeals Procedures Manage Plans Wisely and in Employees' Interest Refrain from Interference or Retaliation
Patient Protection and Affordable Care Act
This law is intended to ensure that most Americans will have adequate health insurance coverage.
defined contribution plan
You know how much money you are putting in to your retirement plan. Client is responsible for their portfolio- type of retirement plan in which the employer, employee or both make contributions on a regular basis (ex: 401k, lump-sum) popular with people who only want to stay 2 or 3 years with a company include 401(k)s, profit-sharing plans, stock bonus plans, and employee stock ownership plans (ESOPs). In all these plans, contributions are made into individual employee accounts.
Health Insurance Portability and Accountability Act (HIPAA)
an act that restricts but does not eliminate the use of preexisting condition exclusions by health plans
Welfare plans
any benefit plans covered by ERISA that are not pension plans
presumption of prudence standard
companies that offered their own stock as an investment option when the documents of the defined contribution plan called for that would generally be deemed to have acted prudently, even if there were problems with the stock
ministerial functions
discrimination on other protected class grounds is not contested where ministerial positions with spiritual functions are involved. Day-to-day functions associated with pension plan administration necessary for plan operation Carried out within a pre-established framework of rules, person does not have discretionary authority or control over plan administration so not considered fiduciary plan
vesting
employees covered under a pension plan acquire a non-forfeitable right to receive a pension.
anti-cutback rule
employers are also prohibited from making changes to pension plans that reduce pension benefits already accrued by employees
defined benefit pans
get the benefit you were promised you know the amount you will be getting at the end ,a plan that promises a specific pension benefit upon retirement.
Benefits
important part of compensation, the availability of pensions and health insurance to employees.for employers, they account for a significant portion of total labor costs and require considerable expertise to administer.many employment and tax laws affect benefit plan.
Pension plans
plans designed to provide retirement income to employees or to otherwise defer income until after employment ends
qualified plans
receive favorable tax treatment, which provides employers with a strong incentive to conform to erisa's requirement
Cash balance plans
rewarding people for working.not seniority, formula is different,it's just a function of you continuing to work.some private sector employers that continue to offer defined benefit plans have started using these, they are cheaper and offer employers more certainty regarding costs.