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Pension Benefit Guaranty Corporation. The IRS also regulates such plans under provisions of the InternalRevenue Code.fixed annuity— An annuity under which the insurer guarantees to pay at least a specified monthlybenefit amount for each dollar applied to purchase the annuity. Also called fixed benefit annuity.forfeiture —The non-vested part of a participant’s account balance in a defined contribution plan whichhe or she loses upon termination of employment before attaining full vesting. Under IRS rules, somedefined contribution plans credit forfeitures to the accounts of all other participants.guaranty association —An organization that protects persons from losses suffered through theinsolvency of an insurance company.immediate annuity— An annuity under which income payments begin when the annuity is purchased.impairment —Any aspect of the health, occupation, activities, or life-style of an individual that couldincrease his or her expected mortality or morbidity.income replacement ratio —The percentage of pre-retirement income that a retiree would need toreceive after retirement in order to have a post-retirement standard of living equivalent to his or her pre-retirement standard of living. This ratio is generally less than 100 percent because some expenses (i.e.,taxes, commuting costs, clothing expenditures, savings needs) decrease after retirement. Also known as areplacement ratio or rate.indexing —Automatic adjustment of benefits to compensate for the effects of inflation after paymentsbegin, generally in accordance with increases in the level of a price index such as the Consumer PriceIndex (CPI).
27individual retirement account (IRA) —A personal retirement savings account that allows funds toaccumulate without current income taxation on the investment earnings. Contributions to a traditional IRAup to $2,000 annually may be tax-deductible, depending on the worker’s earnings and coverage by aprivate pension plan. All distributions from a deductible IRA are taxable when received. See also rolloverIRA, Roth IRA.inflation-indexed Treasury bond —A U.S. government security that increases the payments ofinterest and principal in proportion to the Consumer Price Index (CPI).installment refund annuity— A type of refund annuity under which the refund is payable in a series ofperiodic payments. See refund annuity and cash refund annuity.joint annuitant— The annuitant’s spouse or other individual named to receive survivor annuity paymentsafter the death of the annuitant.joint and survivor annuity— An annuity that provides a series of payments to two or more individualsas long as one of them survives.life annuity— A series of payments that are made at regular intervals as long as a named individual, theannuitant, is then alive. Also known as a straight life annuity.life annuity with period certain —A life annuity which promises that if the annuitant dies before the