Forms & Publications


Term Definition
Safe Harbor Used to determine a safety net approach to various tax rules. Often, simplified safe harbor rules will provide an easier approach to detailed calculations or procedures.
Safety Member A safety member is a permanent employee of the plan sponsor working full time in firefighting or law enforcement.
Salary Escalation An assumption used to project salary increases.
Salary Reduction Agreement The employer and the employees enter into individual, separate contracts in which each employee agrees to take a reduction in salary (either as a stated dollar amount or as a percentage of compensation).
Self-Administered Trustee Plan A retirement plan under which contributions to purchase pension benefits are paid to a trustee (generally a bank) which invests the money, accumulates the earnings and interest, and pays benefits to eligible employees under the terms of the retirement plan and trust agreement. This plan is administered by the employer, or by a committee appointed by the employer under the terms of the plan and the trustees.
Service Employment taken into consideration under a pension plan. Years of employment before the inception of a plan constitute an employee’s past service; years thereafter are classified in relation to the particular actuarial valuation being made or discussed. Years of employment (including past service) prior to the date of a particular valuation constitute prior service; years of employment following the date of the valuation constitute future service; a year of employment adjacent to the date of the valuation, or in which such date falls, constitutes current service (included in future service).
Service Credit A period of employment before or after the effective date of the plan that is recognized as service for one or more plan purposes, such as determination of benefit amounts, entitlement to benefits and/or vesting.
Service Credit -Purchasing Purchasing service credit is the application and payment process by which service prior to membership (or LOA time during membership) may be purchased as additional retirement service credit.  
Service Credit -Vesting Vesting occurs when a member has accumulated 5 years of employment or combined plan sponsor and reciprocal system retirement service credit. It entitles a member to receive a retirement benefit when the minimum age and service requirements are met.
Service Retirement Allowance A service retirement allowance is the lifetime monthly benefit received by a member who has retired after meeting the minimum age and plan sponsor/reciprocal service requirements.
Service Retirement -Minimum Age & Service Requirements A contributory member in a 1937 Retirement Act Systen must satisfy one of the following minimum age and service requirements in order to retire: • 50 years of age with at least 10 years of County service credit • At least 30 years of County service (20 years for safety members) regardless of age • 70 years of age, regardless of how many years worked, if a retiring general member All members may use reciprocal agency service credit to meet these requirements.
Service-Connected Death A service-connected death is a death that occurs as a result of the member performing his job.  
Service-Connected Disability A service-connected disability is an injury or disease that occurs or is aggravated as a result of the member's employment, and that permanently prevents her from performing the duties of her job.  
Simplified Employee Plan (SEPs) Essentially, an IRA to which an employee and his or her employer may contribute. Any employer contributions are excluded from an employee's income.
Social Security Advancement (Temporary Annuity) The Social Security Advancement is a retirement payment option offered to contributory plan members who are fully insured under Social Security, retire before age 62, and are receiving a service Retirement Allowance. It is designed to provide approximately the same total retirement plan/Social Security income before and after age 62.   Prior to age 62 a member's basic retirement allowance is increased by a percentage of the member's estimated Social Security benefit. At age 62 the allowance is then decreased by the full amount of the estimated Social Security benefit. (The estimated Social Security benefit used may be more or less than the actual Social Security benefit.)
Social Security Supplement A temporary monthly supplement paid until a retiree's 62nd birthday. This restores the amount of Social Security which is subtracted from covered compensation when retirement income is determined.
State Teachers Retirement System (STRS) The retirement system for teachers in the State of California.
Statutory Plan In California any retirement plan established by statute. Private sector retirement plans would typically be established via corporate resolution.
Step Rate Retirement Formula A method of integrating private pension- plan benefits with Social Security retirement benefits. A higher benefit multiplier is applied to earnings above a specified level or breakpoint (e.g., one percent up to $20,000; 1.5 percent above $20,000). IRS regulations limit the differential in the multiplier.
Stock Bonus Plan A plan established and maintained by an employer to provide benefits similar to those of a profit-sharing plan, except that the contributions by the employer are not necessarily dependent upon profits and the benefits are distributable in stock of the employer company. For the purpose of allocating and distributing the stock of the employer that is to be shared among employees or their beneficiaries, such a plan is subject to the same requirements as a profit-sharing plan.
Stock Grant Plan Gives stock to employees at little or no cost. Stock grants take two basic forms: (1) stock-appreciation grants and (2) full-value grants. Stock appreciation grants entitle the employee to receive payment equal to the appreciated value of a share of stock (or number of shares or units) over a designated period of time. May be qualified or non-qualified under IRS regulations. A full-value grant entitles the employee to receive a total value of the worth of the share of stock (or number of shares or units) over a predetermined period of time.
Stock Option A right to purchase (exercise shares of company stock) at a fixed price (grant price) over a stated time period (award period) after certain time requirements are met (vesting period).
Stock Purchase Plan (non-qualified) A plan that is, in effect, a management stock purchase plan. It allows senior management or other key personnel to purchase stock in the business. There are, however, certain restrictions (1) the stockholder must be employed for a certain period of time, (2) the business has the right to buy back the stock, (3) stockholders cannot sell the stock for a defined period of time.
Stock Purchase Plan (qualified) A program under which employees buy shares in the company’s stock, with the company contributing a specific amount for each unit of employee contribution. Also, stock may be offered at a fixed price (usually below market) and paid for in full by the employees. Benefits are distributed in stock of the employing company.
Survivor A survivor is an eligible spouse or minor child who has survived a deceased member and is entitled to either a continuing allowance or a lump-sum death benefit. The member's surviving spouse receives a monthly allowance for life, whereas a surviving minor child receives an allowance for as long as she remains eligible.
Survivor Benefit Payments to the beneficiary of a deceased participant. target benefit plan Contributions are based upon an actuarial valuation designed to provide a target benefit to each participant upon retirement. The plan does not guarantee that such benefit will be paid; its only obligation is to pay whatever benefit can be provided by the amount in the participant’s account. A hybrid of a money purchase plan and a defined benefit plan.