NIPA APA key terms

The portion of a participant's pension benefit earned to date under the plan's formula, expressed as a monthly annuity beginning at normal retirement age unless the plan specifies otherwise.

Two benefit streams of equal present value under the plan's stated actuarial assumptions, used to compare optional forms of payment such as lump sums and joint and survivor annuities.

An ERISA-mandated disclosure sent annually to participants in defined benefit plans showing plan assets, liabilities, funded percentage, and PBGC coverage limits.

The yearly information return filed with the Department of Labor reporting plan financial condition, operations, and compliance, with schedules for financial statements and participant counts.

The process by which a participant earns additional pension credit for a year of service, commonly through a unit benefit, flat benefit, or cash balance formula.

A period of employment separation or insufficient hours that can affect vesting credit, benefit accrual, and eligibility, subject to plan rules and statutory protections.

A defined benefit plan that expresses benefits as a hypothetical account balance credited with pay credits and interest credits rather than as a monthly annuity.

A set of trades or businesses under common control treated as a single employer for qualified plan purposes, affecting coverage, nondiscrimination, and top-heavy testing.

The Code section 410(b) test measuring whether a plan benefits a sufficient percentage of rank-and-file employees or satisfies the ratio percentage or average benefit test.

A pension plan promising a specified benefit at retirement, typically funded by employer contributions and subject to minimum funding standards and PBGC insurance.

A plan maintaining an individual account for each participant, where benefits depend on contributions, investment performance, and forfeitures rather than a promised benefit formula.

A taxable distribution paid directly from a qualified plan to an eligible retirement plan or IRA, avoiding mandatory withholding and current taxation.

Any distribution to an employee from a qualified plan other than certain periodic payments, minimum required distributions, and hardship withdrawals, which may be rolled over tax-free.

Federal law establishing fiduciary duties, reporting and disclosure obligations, participation and vesting standards, and funding rules for private-sector employee benefit plans.

A person who exercises discretionary authority or control over plan management or assets, or who renders investment advice for a fee, and owes duties of loyalty and prudence.

The ratio of a defined benefit plan's assets to its funding target, used to determine funding requirements and benefit restrictions under the pension funding rules.

A distribution from a plan on account of an immediate and heavy financial need, permitted only to the extent necessary and subject to plan terms and safe harbor standards.

An employee who satisfies the statutory compensation or ownership thresholds, whose benefits are limited and who is counted separately in nondiscrimination testing.

A benefit form providing payments for the participant's life and, after death, a survivor annuity to the spouse, generally required as the default form for married participants.

Payment of a participant's entire accrued benefit in a single amount, subject to plan terms, spousal consent rules, and actuarial equivalence requirements.

The smallest employer contribution required for a defined benefit plan year under the funding rules, reflecting target normal cost and shortfall amortization.

The age specified in the plan at which a participant may retire with an unreduced accrued benefit, subject to statutory limits and plan terms.

The person or entity designated in the plan document to manage plan operations, including disclosures, claims, and compliance, and who is a fiduciary by definition.

A transaction between a plan and a party in interest, such as a sale, loan, or service arrangement, that is barred unless a statutory or administrative exemption applies.

A court order recognized under the plan that assigns a portion of a participant's benefit to an alternate payee, such as a spouse or dependent.

A survivor benefit payable to a spouse if the participant dies before retirement, generally required unless waived with spousal consent.

An occurrence such as a plan termination, merger, or funding decline that must be reported to the PBGC and may trigger notice obligations to participants.

A federal corporation that insures benefits in covered defined benefit plans and administers terminated plans when no responsible employer remains.

The minimum amount that must be distributed annually from a qualified plan once the participant reaches the applicable age, calculated under prescribed tables.

A spouse's written, witnessed, or notarized agreement permitting a participant to elect a form of benefit other than the required survivor annuity.

A plain-language summary of the plan's annual Form 5500 financial information that must be furnished to participants each year.

A written document describing plan terms, eligibility, benefits, and participant rights, required to be furnished to participants and updated periodically.

A plan in which more than 60 percent of account balances or accrued benefits belong to key employees, triggering minimum contribution or benefit requirements.

A participant's nonforfeitable right to an accrued benefit, determined by years of service and subject to statutory minimum schedules.

A 12-month period, measured by hours or elapsed time under the plan, used to determine eligibility, vesting, and benefit accrual credit.