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Pension Evaluation
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Past Service: "Service to an employer that is recognized for the defined benefit pension plan purposes, but either occurred before the employee was a member in the plan, or before the plans inception. Employees have the option to purchase past service, by cash or by qualified retirement plan roll-over, to increase their years of service in the calculation of their retirement pension."

Pay As You Go Pension Plan: "A retirement scheme where the plan beneficiaries decide how much they want to contribute either by having the specified amount regularly deducted from their paycheck or by contributing the desired amount in a lump sum. A pay as you go pension plan is similar to a 401k. The employee can choose among the various investment options and decide on whether they want a higher return by investing in a more risky fund or a safer fund which provides steady returns."

Pay Yourself First: "A phrase commonly used in personal finance and retirement planning literature that means to automatically route your specified savings contribution from each paycheck at the time it is received.
Because the savings contributions are automatically routed from each paycheck to your investment account, this process is said to be "paying yourself first"; in other words, paying yourself before you begin paying your monthly living expenses and making discretionary purchases"

Pension Adjustment (PA): "The amount of contributions that can be made to a Registered Retirement Savings Plan (RRSP) on top of any contributions to a Registered Pension Plan (RPP) in a given year."

Pension Adjustment Reversal (PAR): "A numerical calculation in certain Canadian pension plans that reverses a previously assumed pension value. This can occur when an employee leaves a company after a short period of time and before he or she is vested. As a result, the employee may only have his or her pension contributions and not any employer contributions. The pension adjustment reversal "reverses" the overstated pension adjustments, since the employer contributions are not counted."

Pension Benefit Guaranty Corporation (PBGC): "A non-profit corporation that functions under the jurisdiction of the Department of Labor and that guarantees the payment of certain pension benefits under defined-benefit plans that have been terminated with insufficient money to pay benefits."

Pension Benefit Obligation (PBO): "An accounting term used to describe the amount of money a company must pay into a defined-benefit pension plan to satisfy all pension entitlements that have been earned by employees up to that date. The pension benefit obligation (PBO) is calculated by an actuary, who determines the benefits needed through a present value calculation."

Pension Fund: "A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees. The pension fund is a common asset pool meant to generate stable growth over the long term, and provide pensions for employees when they reach the end of their working years and commence retirement."

Pension Maximization: "A retirement strategy for couples that involves purchasing a single life annuity on the older spouse rather than a dual or joint life with last survivor annuity that covers both people. The increased income received from the annuity will be used to fund the couple's retirement up until the older spouse dies.
Should the older spouse die first, the surviving spouse will use the life insurance proceeds to purchase a single annuity to fund the remainder of his or her retirement. At this point, the higher age of the surviving spouse will allow for more annuity income than he or she would have received at the beginning of the pension maximization process."

Pension Option: "A set of options that a pensioner has in regard to the handling of his or her pension. Pensioners must make choices that determine how the funds will be distributed, and they must weigh the advantages and disadvantages of each option to determine which will work best for their financial and family situation."

Pension Pillar: "One of three pension formats as outlined by the World Bank in 1998 and which has since been adopted by many economically reforming countries in Central and Eastern Europe. The goal of the three-pillar system is to separate the major objectives of pension (retirement) plans into the following pillars:
Pillar 1 – A standardized, state-run pension system, which offers basic coverage and is primarily focused on reducing poverty.
Pillar 2 – A funded system that recipients and employers pay into; this includes pension funds and defined-contribution accounts/plans.
Pillar 3 – Voluntary private funded accounts, including individual savings plans, insurance, etc."

Pension Plan: "A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for an employee's future benefit. The pool of funds is then invested on the employee's behalf, allowing the employee to receive benefits upon retirement."

Pension Plan Administrator: "An individual responsible for managing the day-to-day affairs and the strategic decisions involved with a group's pension fund/plan. More specifically, the plan administrator ensures that money is being contributed into the fund, the proper asset allocation decisions are made and that payouts are promptly distributed among all qualified plan participants or beneficiaries."

Pension Protection Act of 2006 (PPA): "An act of legislation that makes a large number of reforms to U.S. pension plan laws and regulations. This law made several pension provisions from the Economic Growth and Tax Relief Reconciliation Act of 2001 permanent, including the increased IRA contribution limits and the increased salary deferral contribution limits to a 401(k). It also attempts to strengthen the overall pension system and reduce the reliance on the federal pension system and the Pension Benefit Guaranty Corporation."

Pension Shortfall: "A situation in which a company offering employees a defined benefit plan does not have enough money set aside to meet the pension obligations to employees who will be retired in the future."

Pensionable Service: "The period of service, expressed in a yearly figure, for which a worker has established pension credits for a pension plan. Pension benefits are typically based on the worker's pensionable service and highest average salary. "

Per Stripes: "A stipulation that, should a beneficiary predecease the testator, the beneficiary's share of the inheritance will go to his or her heirs."

Period Certain: "An annuitization-method option with which the annuitant selects a specific time period for which the annuity income payments will last. This is unlike the more commonly selected life option, with which the annuitant receives an income payment for the rest of his or her life, regardless of how long (or short) their retirement years end up lasting."

Permanent Wyoming Mineral Trust Fund (PWMTF): "Established in 1974 by the Wyoming Legislature, the Permanent Wyoming Mineral Trust Fund (PWMTF) is that state's oldest and largest permanent fund, with assets of $4.2 billion as of June 30, 2009. It is funded by a portion of severance taxes on mineral revenues and occasional direct legislative appropriations, while income from the fund goes to the state general fund. The fund covers part of the costs of running the state, and also acts like an endowment for the state by conserving its wealth for future generations."

Personal Financial Advisor: "Professionals who help individuals manage their finances by providing advice on money issues such as investments, insurance, mortgages, college savings, estate planning, taxes and retirement, depending on what the client requests help with. Some financial advisors are paid a flat fee for their advice, while others earn commissions from the investments they sell their clients. Fee-only arrangements are widely regarded to be better for the client."

Personal Trust: "A trust created for a person or persons. Personal trusts can be used by wealthy or middle-class beneficiaries to accomplish a variety of financial objectives. Personal trusts are separate legal entities that have the authority to buy, sell, hold and manage property for the benefit of their beneficiaries."

Phase Out: "1. The gradual reduction of a tax credit as a taxpayer approaches the income limit to qualify for that credit.

2. The gradual reduction of a taxpayer's eligibility to contribute to a tax-advantaged retirement account as the taxpayer approaches an income limit."

Phased Retirement: "A broad range of employment arrangements that allow an employee who is approaching retirement age to continue working with a reduced workload, and eventually transition from full-time work to full-time retirement. Phased retirement may include a pre-retirement, gradual reduction in hours (or days) of work and/or post-retirement, part-time work for pensioners who wish to remain employed.
Part-time, seasonal and temporary work or job-sharing are all work arrangements that can be a form of phased retirement."

Phases of Retirement: "A six-stage process described by researcher Robert Atchley that includes pre-retirement, retirement, contentment, disenchantment, reorientation and routine. Not all individuals will experience all of these stages, but the underlying idea is to provide a framework for thinking of retirement as a process that involves both emotional and financial adjustments rather than as just a one-time event"

Plan Participant: "A plan participant either contributes into a pension plan or is in a position to receive benefit payments from the plan. It includes a retired person receiving distributions from a pension plan, or a beneficiary or dependent named by a contributing member."

Plan Sponsor: "A designated party, usually a company or employer, that sets up a healthcare or retirement plan such as a 401(k) for the benefit of the organization's employees. The responsibilities of the plan sponsor include determining membership parameters, investment choices and, in some cases, providing contribution payments in the form of cash and/or stock."

Pop-Up Option: "A joint and survivor pension option, generally limited to married couples, that is triggered if the pension plan member's spouse predeceases the plan member. The pop-up option then boosts the plan member's pension after the spouse's death. The increase in the pension amount is made possible by the fact that the pension plan no longer has to provide a spousal pension once the plan member passes away."

Portability: "An employee's ability or right to retain certain benefits when switching employers. Benefits such as certain pension plans and health insurance have portability. Most 401(k) plans have portability of benefits, as well as health savings accounts (HSAs)."

Post-Retirement Risk: "The potential risks to financial security that a retired individual could encounter. Post-retirement risks can result in unexpected costs and expenses or lower income, which can jeopardize even the best-laid retirement plans."

Pour-Over Will: "A will established by an individual who has already taken the necessary steps to set up a trust, so that upon the death of the individual, all of his or her assets are to be transferred - or "poured over" - to the trust. By doing so, the individual ensures that his or her estate has an explicit direction to shift assets into the trust."

Premature Distribution: "Any distribution taken from an IRA, qualified plan or tax-deferred annuity that is paid to a beneficiary that is under age 59.5. Premature distributions are subject to a 10% early-withdrawal penalty by the IRS as a means of discouraging savers from spending their retirement assets prematurely. "

Pretax Contribution: "Any contribution made to a designated pension plan, retirement account or other tax deferred investment vehicle where the contribution is made before federal and/or municipal taxes are deducted."

Primary Beneficiary: "A beneficiary in a will, trust or insurance policy that is first in line to receive named benefits. Primary beneficiaries are contrasted with contingent beneficiaries, who will only receive benefits if the primary beneficiary has died. There can be more than one primary beneficiary."

Probate: "The legal process in which a will is reviewed to determine whether it is valid and authentic. Probate also refers to the general administering of a deceased person's will or the estate of a deceased person without a will. The court appoints either an executor named in the will (or an administrator if there is no will) to administer the process of collecting the assets of the deceased person, paying any liabilities remaining on the person's estate and finally distributing the assets of the estate to beneficiaries named in the will or determined as such by the executor."

Probate Court: "The segment of the judicial system primarily charged with handling such matters as wills, estates, conservatorships and guardianships, as well as the commitment of mentally ill persons to institutions designed to help them. In addition, the court may also deal with similar situations involving minors, although typically through a juvenile division."

Provident Fund: "A compulsory, government-managed retirement savings scheme used in India, Hong Kong, Singapore, Malaysia, Mexico and other countries that is similar to the United States' Social Security program. It is run by a government for the benefit of its citizens. A provident fund is a form of social safety net into which workers must contribute a portion of their salaries and employers must contribute on behalf of their workers. The money in the fund is then paid out to retirees, or in some cases to the disabled who cannot work."

Prudent Expert Act: "A measure contained in section 404(a)(1)(B) of the Employee Retirement Income Security Act (ERISA) that requires the fiduciary of a defined contribution retirement plan to use "care, skill, prudence and diligence", and to act in the same way that someone "familiar with such matters" would act. The "familiar with such matters" language has been interpreted to mean "expert". This language creates an important distinction from the earlier prudent person guideline, in that it holds fiduciaries to a stricter standard.
Also called the "prudent expert rule" or "prudent expert standard"."

Purchased Service: "The additional amount of service years that Canadian pensioners can purchase to go towards their pension account. Pensioners may purchase additional service time to cover service absences for reasons such as authorized leave without pay (including maternity or paternity leave), military service and long-term disability waiting period."

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