Early (or Premature) Distribution
A distribution from a qualified plan, an IRA, or a 401(k), Keogh, or
similar plan that takes place before the recipient has reached age 59
½ and is not associated with a rollover. A 10% penalty is assessed to
the amount that is distributed from a plan unless the distribution is
made to a beneficiary after the death of the employee, attributable to
the employee's disability, a 72(t) distribution or, for qualified plans,
made to an employee after separation of service and after attainment of
age 55.
Early (or Premature) Withdrawal
A distribution from an IRA or other tax-favored retirement plan by a
participant prior to the age of 59 ½ that is not associated with a rollover.
Employee Contribution
The amount of money an employee puts into a qualified retirement plan
by having a certain amount deducted from his or her paycheck.
Employee Stock Ownership Plan
A profit sharing or stock bonus plan in which the funds must be invested
primarily in the employer's securities. An ESOP may borrow to obtain the
company stock.
Employer Contributions
Elective deferrals, nonelective contributions, and discretionary profit
sharing contributions to a qualified plan.
Employer Matching Contribution
The amount, if any, that the employer contributes to the employee's
401(k) account. Matching contributions are usually configured to provide
a set percentage of an employee's contribution up to a fixed limit.
ERISA
Employee Retirement Income Security Act of 1974 - was developed to protect
the rights of participants (and their beneficiaries) in qualified plans.
Excess Contributions
The excess of the elective contributions made to a 401(k) plan for highly
compensated employees for the plan year over the maximum amount of such
contributions permitted under the ADP test for the year.
Excess Distribution
The total distributions made to an individual in a given year which
exceed $155, 000 (in 1996, or $112,500 as indexed for inflation). A 15%
excise tax is applied to this excess amount. If special averaging is elected
with respect to a lump sum distribution, the lump sum distribution is
treated separately for purposes of applying the penalty tax, and the annual
limitation discussed above is 5 times the otherwise applicable limit or
$775,000 (in 1996, or $562,500 as indexed for inflation).
Expense Ratio
Charged to mutual fund shareholders as a percentage of total investments, this annual fee is for administration, operation, and
management expenses associated with a particular fund. It may include management, 12b-1, and other fees, but not the sales charges.
It is the actual amount that a fund takes ou t of its as sets annually to cover expenses.
Expense ratios may be a function of a fund's size rather than of its success in controlling expenses.
