Forms & Publications


Term Definition
Basic Death Benefit The basic death benefit is a lump-sum payment that is made to a survivor, named beneficiary, estate, or trust in the event of an active member death The payment may have two components: • Member contributions (plus credited interest) • Salary death benefit equal to a specific number of months salary.
Basis Recovery Calculation of the taxable portion of annuity payments; i.e., that portion of the annuity payment attributable to pre-tax employee contributions to the retirement plan. The taxable portion of annuity payments may be calculated by using
(1) the IRC §72(b) exclusion ratio, which is obtained by dividing the “investment in the contract” (after-tax contributions) by the “expected retum”, or
(2) the safe harbor method (IRS Notice 88-118) which provides for calculation of the nontaxable portion by dividing the “investment” by the number of payments to be received. Notice 88-1 18 provides a table with the number of payments to be received based on the annuitant’s age.
Before-Tax Contributions Pre-tax or taxable contributions are member contributions made through payroll deductions which are excluded from a member’s taxable income for the year in which they are made. They also include those contributions that are rolled over into a contributory plan either from an IRA or another qualified employer plan. Taxable contributions are not taxable until received either as retirement income or as a lump-sum payment when a member terminates or dies
Beneficiary A beneficiary is the person, other than the plan member, designated to receive the benefit resulting from the death of an employee, such as the proceeds of a life or accident insurance policy or benefits from a pension plan.
Benefit Rights of the participant or beneficiary to either cash or services after meeting the eligibility requirements of the pension or other benefit plans. Pension benefit usually refers to monthly payments payable on retirement or disability.
Benefit Attributable To Employer Contribution (BATEC) A calculation used in the defined benefit limit. Determined by calculating the total benefit less the Benefit Attributable to Member Contributions.
Benefit Estimate A retirement benefit estimate is an projection of future retirement benefits based on a member's age, years of service, and final compensation.   An estimate of the Unmodified Retirement Allowance is included in the member's annual benefit statement if they are vested and eligible to retire.
Benefit Statement  A benefit statement is a report prepared by a retirement system for each active member that summarizes information about his retirement account. It includes the member's plan, beneficiaries, and service credit. Members in contributory plans also receive a report of their contributions and interest.
Beta Beta (market sensitivity) is a measure of the extent to which a fund’s portfolio fluctuates with the market as represented by the S&P 500. To calculate beta, the sensitivity of the fund’s portfolio to market patterns is measured. Beta is a statistical estimate of the average change in the fund’s rate of return corresponding to a 1% change in the market.
Board of Retirement The Board of Retirement is the group that has responsibility for the management of a retirement system. It also oversees the administration of benefits and services provided to members and survivors.
Book Value A ratio of the total shareholder’s equity in an organization, divided by the number of shares outstanding. Book value of a share is rarely equivalent to its market value.
Break in Service Under ERISA, a calendar year, plan year or other 12 consecutive month period designated by the plan during which a plan participant does not complete more than 500 hours of service. (This general rule has been modified for certain industries, particularly those characterized by seasonal employment patterns.) When a break in service occurs, the participant must again meet the plan’s eligibility requirements to participate.