U


Unbundled Services

An alternative to a turnkey package. A plan sponsor would choose various providers for record keeping, a plan document, investment management, trusteeship, etc., depending on their expertise in those individual fields.

Unfunded Plan

A plan under which an employer promises to pay future benefits to one or more employees from the employer's general assets. The company's promise is not secured or guaranteed in any way.

Unfunded Prior

In a defined benefit pension plan, the difference between the actuarially-determined value of the projected future benefit costs (both vested and manifested) and administrative expenses, as well as the unamortized portion of prior benefit costs, under the plan, and the market value of the plan's assets.

Unfunded Vested Pension Liability

In a defined benefit pension plan, the difference between the actuarially-determined value of the vested (nonforfeitable) benefits under the plan, and the market value of the plan's assets.

Unit Accounting

A method of reporting the value of a unit of a separate account. A participant contributes to a separate account and the contributions are used to purchase units of that fund.

Unit Benefit Formula

A benefit formula that credits retirement benefits in a defined benefit plan with a fixed percentage or dollar amount per year of service or participation. Example: $60,000 x 20 years of service x 2% results in a retirement benefit of $24,000 per year.