The stated probability distribution of possible returns.

Fiduciary

An individual or organization that has discretionary authority or control over a qualified plan trust, its assets, or its administration, or that - for compensation - provides investment advice regarding plan assets.

Fiscal Year

An accounting period consisting of 12 consecutive months.

Five-Year Cliff Vesting

An approved vesting schedule in which the participant is fully vested in his or her benefits at the completion of five years of service. Under this schedule, the participant who is terminated or leaves the company prior to five years of service has no right to any benefits in the plan.

Five-Year Rule

An IRS rule stating that all of a deceased's funds in qualified plans, IRAs, and so forth, must be distributed within five years of the end of the year in which the individual dies,. The only exception to this is when the retirement vehicle names a designated beneficiary.

Fixed-Income

A synonym for bonds, which promise a fixed rate of interest until they mature. Bond mutual funds are called fixed-income funds, but the name is misleading because in a bond mutual fund your income fluctuates. Your principal value also fluctuates (both in individual bonds and in bond funds) as the prevailing interest rate changes. When the interest rate rises, existing bonds lose value because they now pay a lower-than-prevailing rate. When the interest rate drops, the value of existing bonds goes up because they now pay a higher-than-prevailing rate.

Flat Amount Formula

An approach to determining the retirement the retirement benefit in a defined benefit plan that promises each participant an annual flat dollar amount for each year of service.

Flat Percentage Formula

An approach to determining retirement benefits in a defined benefit plan that uses a flat percentage of compensation at retirement.

Forfeitures

Unvested benefits left in a retirement plan by departing plan participants.

Forward Averaging (5 year)

A once-in-a-lifetime election made available to a participant age 59 1/2 receiving a lump sum distribution to calculate taxes due (on the distribution amount). Unless the participant has tax-deductible expenses to offset the income, the 5-year method will always be more favorable than regular ordinary income treatment.

Forward Averaging (10 year)

A once-in-a-lifetime election made available to a participant receiving a lump sum distribution who was age 50 prior to Jan. 1, 1986. This tax calculation is keyed to the 1986 tax rates and may or may not be more favorable than the regular ordinary income treatment.

Front-End Load Fee

At the time a mutual security is purchased - a one-time sales charge is imposed- this fee may be discounted for large purchases.

Frozen Plan

A qualified retirement plan that continues to exist but whose employer contributions have been discontinued. Benefits for plan participants no longer accrue, and distributions have been suspended.

Fundamental Analysis

This valuation of stocks based on fundamental factors, such as company earnings, growth prospects, and so forth, to determine a company's underlying worth and potential for growth.

Funded Plan

A plan for which cash or property is actually set aside for the benefit of the employee.

Fund Manager

Each fund in a plan is managed by professional fund manager. This person's job is to select the investments to be bought and sold in order to meet the underlying fund's investment objective.