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SJCERA GLOSSARY

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Term Definition
Variable Annuity annuity expressed in terms of benefit unit instead of fixed dollar amounts. Annuity in which the amount of each periodic payment fluctuates according to some variable factor. Under an equity annuity plan, payments vary according to the value of a specific portfolio of common stocks and similar investments. Under a cost-of-living plan, benefits are adjusted to reflect variations in a specific index, such as the Consumer Price Index of the Bureau of Labor Statistics. An insured variable annuity is one under which the benefit varies according to the investment results of an insurance company’s separate account (usually invested primarily in common stocks) in which funds have been set aside to provide the annuity .
Vested Member A vested member is a member with at least 5 years of retirement service credit. A member may use reciprocal retirement system credit to meet vesting requirements.
Vesting (1) A benefit plan provision that a participant will, after meeting certain requirements, retain a right to the benefits he or she has accrued (or some portion of them) even if employment under that plan terminates before retirement. Employee contributions are always fully vested. The ERISA specified standards for vesting of employer contributions; these were made more stringent (from the employer’s point of view) by the Tax Reform Act of 1986, (2) The time when an executive’s stock option or SAR becomes exercisable, or other executive compensation becomes non-forfeitable.
Voluntary Employees’ Beneficiary Association (VEBA) As defined in Section 50l(c)(9) of the IRC, a separate organization “providing for the payment of life, sickness, accident, or other benefits to the members.. . or their dependents or designated beneficiaries.” Subject to specific rules and limitations, a company may establish a VEBA for employees, to which it makes tax-deductible contributions. The association invests and accumulates funds for the purpose of paying benefits on a tax-exempt basis.