Glossary

A

Accrued-at-Normal Limit — A limit on PBGC's guarantee of a participant's monthly pension benefit. PBGC guarantees only up to the monthly amount that the participant's defined benefit plan would have paid the participant as a straight-life annuity starting at normal retirement age. PBGC cannot guarantee the portion of any combined early retirement benefit and temporary supplemental benefit that is above this amount. See page 3 of PBGC's Guarantee Limits—an Update and an example.

Accrued Monthly Benefit — The amount that a participant has earned under the terms of a pension plan, payable as a monthly benefit starting at "Normal Retirement Age."

Administrative Correction — A method, other than recoupment or recovery, to seek repayment of an over payment.

Alternate Payee — A participant's spouse, former spouse, child, or other dependent who, under a "Qualified Domestic Relations Order (QDRO)," has a right to receive some or all of the participant's pension benefits under a pension plan. Alternate Payees are considered beneficiaries. See Qualified Domestic Relations Orders & PBGC for more information.

Annuitant — A person receiving an annuity.

Annuity — Regular payments (usually monthly) to a person for a set period, such as for a certain number of years, or for life. The type of annuity affects the amount of the payment and how much, if anything, a beneficiary will receive after a participant's death. For example, payment amounts typically are reduced if an annuity has a survivor feature. See Your PBGC Benefit Options for more information.

Assets — Cash, stocks, bonds, real estate, or other property held by a plan.

Automated Clearing House (ACH) Reclamations — Method used to correct overpayments when funds are handled electronically, that is, through direct deposit to a payee who is now deceased.

B

Benefits Administration and Payment Department — plays a consultative role to the Office of Chief Counsel in decisions regarding discretionary authority. 

Bankruptcy Filing Date (or Bankruptcy Petition Date) — The date a bankruptcy case is begun by, or against, a plan sponsor. See When Companies Reorganize for more information.

Beneficiary — Generally a person designated by a pension plan participant, or by the plan's terms, to receive some or all of the participant's pension benefits upon the participant's death. (An "Alternate Payee" under a "Qualified Domestic Relations Order" also is considered a beneficiary.) See Payments to Beneficiaries for more information.

Benefit Accrual — The earning of a benefit, or of additional benefits, under an ongoing pension plan, usually through active employment service covered by the plan.

Benefit Determination — PBGC's determination of a participant's or beneficiary's benefit payable by PBGC under the terms of the participant's plan and Title IV of the "Employee Retirement Income Security Act (ERISA)."

Benefit Determination Letters — Written correspondence of PBGC's determination of a participant's or beneficiary's benefit payable by PBGC under the terms of the participant's plan and Title IV of the "Employee Retirement Income Security Act (ERISA)."

Benefit Freeze — See "Frozen Plan."

Benefit Offset — A partial or total reduction in a person's pension benefit because the person (1) owes money to the pension plan, or (2) is receiving (or has received) other benefits that must be subtracted based on plan terms, such as a benefit from a related pension plan or from Social Security.

Benefit Service — See "Credited Service."

Benefits Attributed to Related Plan — Benefits payable to people entitled to more than one benefit in their own right, are not separated for plans sponsored by members of the same controlled group.

Benefits Attributed to Unrelated Plan — Benefits payable to people entitled to more than one benefit in their own right, are separated for plans not sponsored by members of the same controlled group.

C

Case Actuary — Provides present value (PV).

Cash Balance Plan — A defined benefit plan that defines a participant's benefit in terms of a hypothetical account balance based on a formula using pay credits and interest credits. Cash balance plans are insured by PBGC.

Certain-and-Continuous (C&C) Annuity — An annuity that pays benefits for a set period or for a retiree's lifetime, whichever is longer. PBGC offers a 5-year, 10-year, or 15-year C&C annuity. If the retiree dies before the end of the period chosen, the designated beneficiary will receive the same monthly benefit for the rest of the period. If the retiree dies after the end of the period, benefit payments end. The 5-, 10-, or 15-year period starts when the retiree's benefit payments start, not when the retiree dies. See Your PBGC Benefit Options for more information.

Contingent Annuity Benefits — Recoup only from the benefit with respect to which the overpayment was made.

Controlled Group — All contributing sponsors of the plan and all members of each contributing sponsor's controlled group...

Credited Service (or Benefit Service) — The amount of time that counts toward a participant's pension benefit. Credited service typically is the number of years the participant worked for a company while participating in the company's pension plan. (For participants who worked part-time, credited service may be less than the number of years worked.) Credited service usually ends when the participant retires or otherwise leaves the company, but can end sooner if the employer freezes the plan (see "Frozen Plan"). Credited service ends if the plan is terminated (see "Termination").

D

Date of Plan Termination (DOPT) — See "Plan Termination Date."

Date of Trusteeship — The date that PBGC takes over a terminated defined benefit plan and becomes responsible for making payments to plan participants and beneficiaries.

De Minimis — Total net overpayment is $500 or less. 

De Minimis Rule — Requires that PBGC not seek repayment if the net overpayment is $500 or less. (PBGC no longer waives recoupment if the total overpayment is de minimis)

Debtor — Generally, the person who actually received the overpayment; can be plan participant, beneficiary, or other person; there may be more than one debtor for a benefit.

Deceased Payees Estate — May also be a debtor only for overpayments made after the death of the payee and only for those payments that the estate administrator advises are the property of the estate. 

Deemed Correct Monthly Entitlemant — Amount the payee is receiving.

Deferred Vested (or Terminated Vested) Participant — Generally, a former employee who worked long enough to earn "Vested Benefits" in a pension plan, but who left the company sponsoring the plan without receiving a retirement benefit immediately. Such a participant can receive benefit payments from the plan once he or she reaches the plan's "Normal Retirement Age" or, if the plan allows, the plan's "Early Retirement Age."

Defined Benefit Plan — A pension plan that promises participants a specified benefit, usually a monthly amount, at retirement. The benefit usually is based on some combination of the participant's years of credited service, salary, and age. PBGC insures most defined benefit plans sponsored by private (non-governmental) employers.

Defined Contribution Plan — A plan in which an employee and/or employer makes contributions to the employee's individual plan account. Each participant's retirement benefits are based on the amount in that person's own account, including investment gains and losses, and plan expenses. Common types of defined contribution plans are profit-sharing plans, 401(k) plans, employee stock ownership plans (ESOPs), thrift savings plans, and money purchase plans. PBGC does not insure defined contribution plans.

Department of Labor (DOL) — The U.S. Department of Labor. DOL shares administration and enforcement of the federal pension law — the Employee Retirement Income Security Act — with PBGC and the Internal Revenue Service (IRS). The Secretary of Labor serves as Chair of PBGC's Board of Directors.

Disability Benefit — A benefit paid by some pension plans as a result of a participant's becoming disabled while employed. PBGC guarantees a participant's disability benefit if the participant's plan provides such a benefit and the participant became entitled to that benefit on or before the "Plan Termination Date" or the "Bankruptcy Filing Date," as applicable. (How do I know which date applies?) See Guarantees for Disabled Participants for more information.

Distress Termination — A termination of a defined benefit plan that an employer requests when it is in financial distress and the plan does not have enough assets to pay all benefits that have been earned under the plan. The plan administrator must notify participants and PBGC before the proposed termination, as well as take other required actions. Generally, the employer must prove to PBGC or to a court that it cannot remain in business unless the plan ends. See Distress Terminations for more information.

DOL — See "Department of Labor."

E

Earliest PBGC Retirement Date (EPRD) — The earliest date that PBGC will start paying benefits to a participant. Typically, a participant reaches his or her EPRD at age 55 unless (1) under the participant's plan, the participant could not receive an annuity benefit until a later age, or (2) PBGC determines that participants typically retire under the plan earlier than age 55 (for example, under a '30-and-out' benefit).

Early Retirement Age — If allowed by a plan, the age at which a participant can first receive benefits from the plan before the participant's "Normal Retirement Age." PBGC cannot recognize an early retirement age that is earlier than the participant's age as of his or her "Earliest PBGC Retirement Date."

Employee Retirement Income Security Act of 1974 (ERISA) — The federal law that establishes the basic requirements for employee benefit plans. The authority for administering and enforcing ERISA is divided among three federal agencies — the Internal Revenue Service (IRS), the U.S. Department of Labor (DOL), and PBGC.

Entitlement — Right granted by contract. Correct amount due to the participant.

Erroneous Payment — Payment made in error. 

F

Fiduciary — Generally, any person or organization with control over a pension plan or its assets. Plan fiduciaries typically include plan trustees, plan administrators, and members of a plan's investment committee. See DOL's Meeting Your Fiduciary Responsibilities and ERISA Fiduciary Advisor for more information.

Five Dollar Rule — When PBGC issues benefit determinations, they will not decrease a payee’s benefit if the change is less than $5 per month.

Flat-Rate Premium — The fixed premium rate that all PBGC-insured plans pay annually to PBGC for each participant. The rate is higher for single-employer plans than for multiemployer plans. Single-employer plans also may owe a "Variable-Rate Premium" depending on the plan's funding level.

Form 5500 — The annual return/report that a pension plan must file with DOL's Employee Benefits Security Administration to provide information about its financial condition, investments, and operations. See DOL's Form 5500 Web site for more information.

Frozen Plan — An ongoing pension plan in which the plan sponsor "freezes" benefits, that is, stops some or all future benefit accruals. A plan can be frozen in several ways. Under a partial freeze, a plan can be frozen for some, but not all, current participants based on, for example, years of service, job classification, or plant location. Under a soft freeze, benefits typically are increased for wage growth, but not for additional service. Under a hard freeze, no participant accumulates any further benefits.

Most frozen plans are closed to new entrants. A plan can be closed to new participants without restricting future benefit accruals of participants already in the plan. Generally, such closures also are viewed as a type of plan freeze. See PBGC's study Hard Frozen Defined Benefit Plans (2008) for more information.

Fully Funded Plan — A defined benefit plan with enough assets to pay all benefits that have been earned under the plan, whether or not the benefits are guaranteed by PBGC. A plan's funded status can vary depending on the method used to value the plan's assets and liabilities. See also "Underfunded Plan."

Future Annuity Benefits — Annuity benefits payable on or after the date of plan termination.

G

Guaranteed Benefit — The amount of a participant's pension benefit that PBGC guarantees based on ERISA's legal limits. The benefits that PBGC may guarantee include pension benefits payable at normal retirement age; certain early retirement benefits and disability benefits; and annuity benefits for survivors of participants. The guarantee applies only to benefits earned on or before the "Plan Termination Date" or the "Bankruptcy Filing Date," as applicable. (How do I know which date applies?)

PBGC's guarantee is subject to several legal limits, including the "Maximum Guaranteed Benefit," the "Accrued-at-Normal Limit," and the "Phase-in Limit." See PBGC's Guarantees for Single-Employer Pension Plans and Multiemployer Benefit Guarantees for more information.

H

Hardship — Shortage of finances due to life circumstances.

Hardship Determination Rule- — After demonstrating that repayment would cause financial hardship, we have discretion to reduce or eliminate a debt for which we would otherwise seek recovery. 

Health Coverage Tax Credit (HCTC) — A tax credit that may be available to certain PBGC-benefit recipients if they are age 55 or older and are covered by qualified health insurance. The HCTC program is administered by the IRS. See Health Coverage Tax Credit (HCTC) FAQs for more information.

I

Installment Payment Option — PBGC allows payment over five years, with a minimum monthly payment of $25

Involuntary Termination — A PBGC-initiated termination of a defined benefit plan. PBGC may seek a plan's termination to protect the interests of participants or the pension insurance program. PBGC must begin terminating any plan that does not have enough money to pay benefits currently due. See Termination Fact Sheet for more information.

IRS — The Internal Revenue Service, a part of the U.S. Department of the Treasury. The IRS shares administration and enforcement of the federal pension law — the Employee Retirement Income Security Act — with PBGC and the U.S. Department of Labor (DOL).

J

Joint-and-Survivor (J&S) Annuity — An annuity that typically pays a participant a fixed monthly amount for life and, after the participant dies, continues payments to the participant's spouse or other designated "Beneficiary" for the rest of the beneficiary's life. The beneficiary's monthly benefit typically is 50%, 75%, or 100% of the participant's monthly benefit. If the beneficiary dies before the participant and payments have already started, the participant's monthly benefit usually will not change and the participant typically cannot name a new beneficiary. Certain J&S choices require "Spousal Consent." See Your PBGC Benefit Options for more information.

Joint-and-Survivor 'Pop-Up' Annuity — An annuity that, unlike the typical form of a joint-and-survivor annuity, increases ('pops up') the participant's monthly benefit to the "Straight-Life Annuity" amount for the rest of the participant's life if the beneficiary dies before the participant. See Your PBGC Benefit Options for more information.

K

L

Legislative and Regulatory Affairs Department (LRD) — Plays a consultative role to the Office of Chief Counsel in decisions regarding discretionary authority. 

Lump-Sum (or Single-Sum) Payment — Payment of a person's plan benefit in a single payment, rather than as an "Annuity." PBGC normally pays a lump sum only if the total value of the benefit is $5,000 or less at the plan termination date. See Lump Sums for more information.

M

Mandatory Employee Contributions — Money that participants must contribute to a defined benefit plan as a condition of employment or plan participation, or to get employer-funded plan benefits. See also "Voluntary Employee Contributions."

Maximum Insurance Limitations — Sets a dollar cap on the benefits PBGC may guarantee.

Maximum Guaranteed Benefit — The largest benefit amount that PBGC can guarantee by law. Generally, the maximum guarantee for a defined benefit plan is fixed as of the "Plan Termination Date." However, if a plan ends during a plan sponsor's bankruptcy that began on or after September 16, 2006, the maximum guarantee is fixed as of the "Bankruptcy Filing Date."

For participants already retired, the maximum guaranteed benefit is based, in part, on the retiree's age on the plan termination date or bankruptcy filing date, as applicable. For participants not yet retired, the maximum is based, in part, on the participant's age when he or she retires. The participant's maximum guaranteed benefit also is adjusted to reflect whether the form of benefit includes a survivor benefit. See PBGC's Guarantees for Single-Employer Pension Plans for more information about limits on PBGC's guarantee.

Monthly Overpayment — Amount the participant received over the correct entitlement for that month.

Multiemployer Plan — Generally, a collectively bargained pension plan maintained by more than one unrelated employer, usually within the same or related industries, and one or more labor unions. See Introduction to Multiemployer Plans, Multiemployer Insurance Program Fact Sheet, and PBGC's Multiemployer Program for more information.

Multiple Employer Plan — See "Single-Employer Plan."

My PAA — My Plan Administration Account, PBGC's secure online application through which plan administrators, plan sponsors or pension practitioners must electronically submit annual premium filings to PBGC. See Online Premium Filing (My PAA) for more information.

MyPBA — My Pension Benefit Account, PBGC's secure online application through which participants and beneficiaries in PBGC-trusteed plans can access their personal information and perform benefit-related transactions with PBGC. See Online Transactions are Easy: MyPBA FAQs for more information.

N

Net Overpayment — Total amount that PBGC will seek through recoupment, recovery, or administrative correction.

Netting Overpayments — Compares how much the person or persons were entitled to and how much was received each month.

Net Underpayments — Total amount that PBGC pays to the participant.

No Interest Rule — As long as the overpayment is paid in a single sum or timely installment payments are being made, PCBG does not charge interest.

Non-vested Participant — Debtor for payments received in error.

Normal Retirement Age — An age defined in every pension plan. The age cannot be greater than the later of age 65 or the participant's age at his or her fifth anniversary of participation in the plan.

Normal Retirement Date — The date when normal retirement benefits may begin under a pension plan (typically, the first day of the month on or after the month that the participant reaches normal retirement age).

Notice of Intent to Terminate — The notice of a proposed termination of a single-employer plan.             

Notice of Determinations (NoD) — Notification of PBGC’s determinations.

O

Office of Chief Counsel (OCC) — Makes decisions to exercise discretionary authority  in consultation with BAPD and the Legislative and Regulatory Affairs Office (LDR)

Ongoing Administration —

Ongoing Plan — A defined benefit plan that has not been terminated (see "Termination"). The "Plan Sponsor" of an ongoing plan is responsible for maintaining the plan and making benefit payments.

Other Debt Collection — Applies when PBGC is unable to collect the debt.

Overpayment — Estimated lump sum or annuity was paid too high; a payment made after they should have stopped; paying someone who was not entitled to a benefit.

Overpayment Accrual Commencement Date — Also known as the recoupment/recovery date; PBGC will not seek repayment for any overpayments made before this date.

P

Participant — A person who is earning or retaining a pension benefit under a pension plan, whether or not the person is currently working for the employer.

Payees — Participants, beneficiaries and alternate payees.

Payment Adjustment Calculation System (PACS) — Method used to calculate the net overpayment, regardless of whether recoupment or recovery is applied.

PBGC — The Pension Benefit Guaranty Corporation, the federal government agency that insures private defined benefit plans. See Who We Are for more information.

PBGC-Trusteed Plan — A defined benefit plan that has been taken over by PBGC and for which PBGC is responsible for calculating and paying benefits.

Pension Benefit — A retirement benefit payable under a pension plan to a participant or the participant's beneficiary.

Pension Plan — Generally, any plan, fund, or program that is established or maintained by an employer and/or employee organization and that provides retirement income to employees.

Phase-in Limit — A limit on PBGC's guarantee of new benefits and recent benefit increases under a defined benefit plan. The limit applies to new benefits and benefit increases added to the plan less than five years before the "Plan Termination Date" or the "Bankruptcy Filing Date," as applicable. (How do I know which date applies?) For each full year the increase was in effect after the later of its adoption date or effective date, PBGC guarantees the larger of 20 percent of the increase or $20 per month up to the amount of the actual increase. See PBGC's Guarantees for Single-Employer Pension Plans for more information.

Plan Administrator — The person or entity identified in the plan document as having responsibility for running the pension plan. If the document does not name an administrator, the plan sponsor is the administrator.

Plan Document — A written instrument under which a pension plan is established and operated.

Plan Sponsor (multiemployer plan) — The association, committee, joint board of trustees, or other entity that oversees a multiemployer pension plan.

Plan Sponsor (single-employer plan) — An employer that establishes or maintains a pension plan for its employees.

Plan Termination Date (or Date of Plan Termination) — The date a defined benefit plan ends.

Plan Trustee — Appointed to take over responsibility for paying benefits to plan participants.

Plan Year — The calendar year or other fiscal year on which a pension plan's records are based.

Practitioner — A professional who administers or consults on the administration of a pension plan. Practitioners include third-party administrators, benefits specialists, consultants, accountants, actuaries, attorneys, and others who deal with pension plans.

Premium Filer — A plan administrator, plan sponsor, or pension practitioner that submits premium filings and associated payments to PBGC for PBGC-insured pension plans.

Present Value (PV) — Used in determining recoupment reduction percent; Comes from the plan valuation or the case actuary.

Prior Plan Administrator — Responsible for paying benefits to plan participants prior to the current Plan Trustee.

Priority Categories — Under ERISA, six categories (referred to as Priority Category 1, Priority Category 2, etc.) to which pension benefits earned by participants in a PBGC-trusteed plan must be assigned. The plan's available assets are then matched up with the benefits in the priority categories to determine the extent to which PBGC can pay benefits that it does not guarantee to a participant. See Priority Categories for more information.

Q

Qualified Domestic Relations Order (QDRO) — A domestic relations order that gives an alternate payee the right to receive some or all of the benefits payable under a plan with respect to a participant, including survivor benefits. A plan administrator or PBGC, if applicable, must determine whether the order meets certain legal requirements. See Qualified Domestic Relations Orders & PBGC for more information.

Qualified Joint-and-Survivor Annuity (QJSA) — A "Joint-and-Survivor Annuity" that meets certain legal requirements and provides a monthly survivor benefit equal to at least 50% of the amount the participant received. The main difference between a QJSA and a general joint-and-survivor annuity (J&S) is that a QJSA beneficiary can only be the participant's spouse (or former spouse under a QDRO), while a J&S beneficiary can be anyone. ERISA requires that a QJSA be the automatic benefit form for a married plan participant except where the total value of the benefit is $5,000 or less. A QJSA may be waived by the participant only with "Spousal Consent." See Payments to Beneficiaries for more information.

Qualified Preretirement Survivor Annuity (QPSA) — An annuity paid to a surviving spouse (or former spouse under a QDRO) when a participant with vested benefits dies before starting to receive benefit payments. The annuity is paid for the life of the surviving spouse based on the benefit that the participant earned before death. A QPSA typically pays an amount equal to the survivor's portion of the QJSA. ERISA requires that a QPSA be provided to the surviving spouse of a married participant except where the total value of the benefit is $5,000 or less. A QPSA may be waived by the participant only with "Spousal Consent."

The spouse can begin receiving a QPSA benefit as early as the date the participant would have been eligible to receive a benefit from PBGC. See Payments to Beneficiaries and "Earliest PBGC Retirement Date" for more information.

R

Reclamation of ACH Transaction — Method used to correct overpayments when funds are handled electronically, that is, through direct deposit to a payee who is now deceased.

Recoupment — The method by which PBGC seeks repayment of a benefit overpayment when a participant or beneficiary is receiving annuity benefits from PBGC. When PBGC first takes over a plan, it pays estimated benefits to retirees until it determines each plan participant's benefit entitlement under Title IV of ERISA (see "Benefit Determination" and If You Are Already Receiving Benefits for more information). If estimated benefit payments were more than the benefit as determined by PBGC, future benefit payments will be reduced by a percentage (typically no more than 10%) until repayment is complete. PBGC does not charge interest if a participant receives more than allowed by law. See also "Recovery."

Recoupment End Date — The last month for which payment is reduced for recoupment except for any final partial monthly recoupment amount.

Recoupment/Recovery Date — Overpayment accrual commencement date.

Recovery — The method by which PBGC seeks direct repayment of a benefit overpayment, typically when a participant or beneficiary is not entitled to annuity benefits from which to recoup the overpayments. In some cases, recovery is a result of legal action. See also "Recoupment."

Recovery Notification — Process taken to recover overpayments

Retiree — A pension plan participant who has begun collecting benefits from the plan or from PBGC.

S

Single-Employer Plan — Generally, a pension plan sponsored by one company or a group of companies under common ownership. It may or may not be collectively bargained. (A multiple employer plan is a type of single-employer plan that is maintained by two or more unrelated companies and does not meet the requirements of a "Multiemployer Plan.”)

Single-Life Annuity — An annuity in which benefit payments are based on the age and other characteristics of only one person. Examples include annuities that will pay only one person (see "Straight-Life Annuity"), and annuities that in some cases pay a surviving beneficiary after the person dies (see "Certain-and-Continuous Annuity"). See Your PBGC Benefit Options for more information.

Six Year Limit — PBCG will not initiate recoupment or recovery of overpayments in any instance in which PBGC notified the debtor of the overpayment more than six years earlier.

Signatory to a Payees Account — Any person(s) who is signed to the payee’s account.

Social Security Benefit- A federal program that provides workers’ retirement income.

Social Security Leveling Option- Provides the participant a higher benefit before he or she becomes entitled to a Social Security Benefit.

Spousal Consent — A spouse's written and notarized agreement to allow the participant to waive the "Qualified Preretirement Survivor Annuity" or elect a form of benefit other than a "Qualified Joint-and-Survivor Annuity."

Spouse — Husband or wife as determined under applicable law.

Standard Termination — An employer-initiated termination of a defined benefit plan that has enough assets to pay all plan benefits. The plan administrator must notify participants and PBGC before the proposed termination, as well as take other required actions. See Standard Terminations for more information.

Straight-Life Annuity — An annuity that pays benefits, typically monthly, for one person's life, with no survivor benefits after that person dies. See Your PBGC Benefit Options for more information.

Stop Payment Orders — Order by PBCG’s paying agent, to their bank, not to pay a specified check.

Summary Plan Description (SPD) — A document that a plan administrator provides to plan participants (and beneficiaries receiving benefits) that describes important features of the pension plan in plain language. The SPD includes information on when employees begin to participate in the plan, how service and benefits are calculated, when benefits become vested, when and in what form participants may receive benefit payments, and how to file a claim for benefits. The administrator must inform participants of major changes to the plan either through a revised SPD or in a separate document called a Summary of Material Modifications.

Supplemental Benefits — Temporary payments made by a plan in addition to a participant's lifetime early retirement benefit. A plan may offer temporary payments from the participant's early retirement age to a specified age, such as age 62 (when a participant becomes eligible for Social Security) or normal retirement age. PBGC may not fully guarantee supplemental benefits; see "Accrued-at-Normal Limit."

Surviving Spouse — The living spouse of a deceased participant. A QDRO may provide that a participant's former spouse is to be treated as a surviving spouse for purposes of a "Qualified Joint-and-Survivor Annuity" or "Qualified Preretirement Survivor Annuity."

Survivor Benefit — The benefit payable to a designated beneficiary upon the participant's death. The most common types of survivor benefits are (1) a qualified preretirement survivor annuity that typically is paid to the surviving spouse of a participant who dies before retiring, and (2) the survivor portion of certain benefit forms (for example, a joint-and-survivor annuity) that is paid to the surviving beneficiary of a participant who dies after retiring. See Payments to Beneficiaries for more information.

T

Ten Percent Cap — A general rule, PBGC reduces future benefits by no more than 10%.

Temporary Additional Recoupment — An addition to any regular recoupment that may be applied for other overpayments.

Temporary Benefit Suspension — Administrative correction method of suspending benefits temporarily to deceased payee’s beneficiary; used when it is too late to implement a stop payment order or ACH reclamation.

Temporary Supplement — A non-level benefit which is paid in addition to a participants benefit for a limited period of time.

Temporary Suspension of Payments — See “Temporary Benefit Suspension”

Terminated Vested Participant — See "Deferred Vested Participant."

Termination (for single-employer plans) — The ending of a single-employer defined benefit plan. The three types of termination are standard and distress terminations, which are initiated by the plan sponsor, and PBGC-initiated (involuntary) terminations. See How Pension Plans End and the Termination Fact Sheet for more information.

Trustee — The person or entity that has the exclusive authority and discretion to manage and control the assets of a pension plan.

Trusteed Plan — See "PBGC-Trusteed Plan."

U

Underfunded Plan — A defined benefit plan without enough assets to pay all benefits earned by participants. A plan's funded status can vary depending on the method used to value the plan's assets and liabilities. See FAQs: Plan Funding and "Fully Funded Plan."

Unfunded Benefit Liabilities — The amount by which the value of a defined benefit plan's promised pension benefits exceeds the plan's assets.

Unfunded Vested Benefits (UVBs) — The amount by which the value of a defined benefit plan's "Vested Benefits" exceeds the plan's assets. UVBs are the underfunding measure on which the "Variable-Rate Premium" is based.

Underpayment — The correct entitlement for a given month less the amount the participant received.

V

Valuation — Used to discover payment errors.

Value of the Termination Benefit ­— Determined as of the DoPT using applicable pension rates and factors in effect on that date.

Variable-Rate Premium — The premium that an underfunded single-employer defined benefit plan must pay to PBGC based on the amount of the plan's unfunded vested benefits. The variable-rate premium is in addition to the "Flat-Rate" per-participant premium, which all PBGC-insured plans must pay regardless of funding status.

Vested — Fully guaranteed as a legal right, benefit, or privilege.

Vested Benefits — Generally, benefits that a participant has earned a right to receive from a pension plan that are not subject to forfeiture. (Under PBGC's premium regulations, specific rules apply for determining whether a benefit is vested for purposes of calculating a plan's variable-rate premium.)

Voluntary Employee Contributions — Amounts that participants contribute to a defined benefit plan, as allowed by the plan, that are not mandatory employee contributions. See also "Mandatory Employee Contributions."

W

With Respect to a Participant — The benefit payable to the participant any annuity benefit payable to the beneficiary.

Write-off Rules- Write off debts in certain situations.

X

Y

Z