A fee imposed for an activity such as sale or promotion associated with share distribution.

401(k) Plan

An arrangement defined by Code Section 401(k) under which a covered employee can elect to defer income by making pre-tax contributions to a profit-sharing or stock bonus plan.

401(k) Stock Bonus Plan

(Also known as a KSOP). A 401(k) plan in which contributions are invested in the employer's stock.

403(b) Plan

A tax-sheltered retirement plan established by governmental employers and other tax-exempt organizations as defined in Section 501(c). This includes organizations whose purposes are religious, scientific, charitable, or educational.

404(c)

A subsection in the Internal Revenue Code which defines how a Plan Sponsor can find relief from liability as a fiduciary for investment decisions made by participants in a participant-directed individual account plan such as Profit Sharing or 401(k) Plans.

457 Plan

A tax-sheltered retirement plan established by governmental employers and other tax-exempt organizations as defined in Sections 501-528. This covers organizations not classified as 501(c)(3) organizations [403(b) plans]. 457 plans include governmental agencies, civic organizations and other religious, scientific, or educational organizations.

5500, 5500-C, 5500-R, 5500 EZ

The federal tax reporting forms required to be filed with the Internal Revenue Service each plan year in which the plan has assets.

72(t) Distribution

Under Internal Revenue Code Section 72(t), distributions may be made from an IRA before age 59 1/2 without a 10% penalty if the distributions are substantially equal periodic payments based on life expectancy and continued for 5 years or until age 59 1/2, whichever is longer.

AAFMA

The American Academy of Financial Management & Analysts™ grants charters, certifications, designations & licenses to qualified members such as: Financial Planners, Investment Bankers, Financial Analysts, Estate Planners, Trust Officers, Investment Advisors, Financial Consultants, Professors, Attorneys, Economists, Portfolio Managers, Investment Managers and related fields. They have a membership of lawyers, brokers, investment managers, institutional investment managers, financial planners, portfolio managers, asset managers and investment advisor representatives.

Accredited Financial Counselor (AFC)

This designation is awarded by the AFCPE - Association for Financial Counseling and Planning Education, www.afcpe.org. The AFP certification is awarded primarily to professionals who meet educational, testing, ethics, reference and experience requirements. AFCPE offers three certification programs through its Institute For Personal Finance (IPF).

Accrued Benefit

A benefit that has accumulated up to a particular point in the participant's employment.

Accrued Benefit Method

A method of calculating and funding defined benefit plan liabilities accruing in a particular year. This method looks at the plan's benefit accrual for the year for each participant at normal retirement and funds the present value of the benefit for that year.

Accrued Interest

The amount credited to a bond or other fixed-income security between the last payment and when the security is sold, or any intermediate date. The buyer usually pays the seller the security's price plus the accrued interest.

Accumulation Value

The formula involved will determine the value of each sub-account. These have a daily valuation and will be affected by investment performance as well as a deduction based on pro-rated daily expenses such as management fees.

ACP Test

A discrimination test that involves a percentage comparison of matching contributions and nonelective employer contributions made on behalf of non-highly compensated employees with the matching contributions and nondeductible employee contributions made on behalf of highly compensated employees.

Adoption Agreement

That portion of the master or prototype plan document that contains all of the alternatives and options that may be selected by an adopting employer.

ADP Test

A nondiscrimination test that compares the deferral rates of non-highly compensated participants relative to their compensation with the deferral rates of highly compensated participants in the same 401(k) plan.

Age-Weighted Profit Sharing Plan

A type of qualified retirement plan that allocates employer contributions based on compensation and age.

Alliance/NonProprietary Funds

Additional funds with which a Provider has an agreement to sell. The Provider normally charges an additional fee to the sponsor for access to these funds.

Annual Administration Fee

The annual fee charged by the Third Party Administrator for plan operation, tax filings, compliance and sometimes recordkeeping.

Annual Investment Charge

The amount charged per year by a 401(k) service provider on your investments in a separate account. It also includes the expenses charged by any underlying mutual fund. Expressed as a percentage of the total value of the separate accounts assets.

Annual Rate of Return

The percentage change (gain or loss) in a funds value from the last trading day of the previous year. Return may also be shown as a cumulative percentage (since the fund was first created) or in a shorter time frame (monthly, quarterly, etc.).

Annuity

A series of equal periodic payments. The usual form of distribution used by defined benefit plans.

Appreciation

Increase in the value of an investment over time.

Ask Price

The price a seller is willing to accept for the security, also called the offer price. This price is usually higher than the Bid price.

Asset

The monetary value of cash & other investments in a qualified retirement plan.

Asset Allocation

Dividing an investment portfolio among the major asset categories, ex;, stocks; bonds; cash; real estate.
The underlying idea is that if you own assets that behave differently, you'll always have one or two investments that are doing okay.

Asset Allocation Fund

A common trust fund or mutual fund that spreads its portfolio among a wide variety of investments, including domestic and foreign stocks and bonds, government securities, and real estate stocks. This gives small investors far more diversification than they could get allocating money on their own. Some of these funds keep the proportions allocated between different sectors relatively constant, while others alter the mix as market conditions change.

Asset Mapping

Asset choices / categories between original plan and new plan are matched as closely as possible .

Average Maturity

A bond matures when it stops paying interest and repays investors' principal. The average maturity of a mutual fund's portfolio is the average length of time it takes those bonds to mature. A fund's maturity tells you a lot about how you can expect it to behave. A fund with a longer average maturity pays a higher yield, for example. But if the prevailing interest rate rises, your principal will lose more value than it would in a fund with a shorter average maturity.