Transfers
Movement by a plan participant of assets from one investment option to another option within the plan. (See also participant-directed cash flow.)
Benefit Payment
Any payments resulting from a participant’s retirement, death, disability or termination of employment, and any payments resulting from a participant’s election to withdraw, borrow, or transfer an amount from such participant’s account in accordance with the terms of a plan under which a participant is an eligible member.
Competing Option
An investment option offered by a defined contribution plan in addition to the stable value investment option that has principal preservation as a primary objective (such as a money market option or short-term bond option) or other characteristics similar to stable value. Additionally, self-directed brokerage or mutual fund windows may be deemed competing if a competing option is made available through the window. The presence […]
Department of Labor (DOL)
A federal agency created in 1913 to advance workers’ welfare, working conditions, and, in general, employment opportunities. A division of the DOL, the Employee Benefits Security Administration (EBSA) is responsible for the interpretation and enforcement of ERISA, e.g., regulating fiduciary standards for pension plans and plan reporting on Form 5500. Click here for official website.
Fiduciary
As defined by ERISA, any person or firm who: (a) exercises any discretionary authority or discretionary control over the management of a plan or any authority or control over the management or disposition of its assets, (b) renders investment advice for a fee with respect to the funds or property of the plan, or has the […]
Interest Rate Risk
The risk that changes in interest rates will affect the return on an investment, either positively or negatively. This effect may be due to realized or unrealized gains or losses on the investment’s market value, to changes in the reinvestment rate on interest income, or to interest rates triggering prepayment or extension of principal.
Mutual Fund Window
Similar to a self-directed brokerage window, except the investments available to supplement a plan’s core investments are limited to mutual funds. (See also competing option.)
Pooled Fund
A fund, typically offered by a bank or trust company that combines the assets of unaffiliated plans into one large group. With respect to a stable value investment option that is a pooled fund, the fund would purchase stable value investment contracts and other investments on behalf of the invested, unaffiliated plans. These funds may also be referred to as […]
Sponsor
See plan sponsor.
