Daily Valuation
A method used to determine on a daily basis the account value of each participant. It provides daily allocation of plan contributions, distributions, investment earnings and transfers.
Defined Benefit Plan
A type of qualified plan that provides a fixed benefit to participants
at normal retirement age. Defined benefit plans generally need to be certified
annually by an enrolled actuary who determines the mandatory annual contributions
necessary to fund the promised benefits.
Defined Contribution Plan
A type of qualified plan in which a participant's benefits are based
solely on the participant's account balance; the account balance depends
on the level of employer and employee contributions and the earnings on
those contributions.
Determination Letter
A letter issued by the IRS indicating whether or not a particular plan meets the IRS's requirements.
Discretionary Contributions
Any employer contributions to a 401(k) or profit sharing plan that are not mandated by the terms of the plan.
Disqualified Person
As defined by the IRS, any person or entity prohibited by the IRC from entering into certain transactions with a qualified plan because of the person's relationship with the plan -- such as fiduciary or plan sponsor.
Diversification
The practice of spreading your risk by investing in several asset classes - each with it's own risk characteristics.
