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     Glossary

Some of the following definitions are specific to Church of the Brethren Pension Plan.

Account — All contributions made by a participant or on the participant’s behalf, along with earnings on those contributions, is credited to an account under the Plan in your name.

Accumulations — The combination of employee and employer contributions and their earnings until annuitization or withdrawal.

Active Lives Account — The portion of Pension Plan assets that includes active and inactive participants’ accumulations that have not yet been annuitized or withdrawn. The Active Lives Account is invested in the investment funds in accordance with each participant’s directives.

Active participant — A Plan participant whose account currently receives employer and/or employee contributions as specified in the employer’s Adoption Agreement.

Actuary — A specialist in the mathematics of risk, which, for the Plan, relates to calculating annuity payouts. Variables include life expectancy, return on investments, interest rates, and accumulations. By calculating the possible payout of benefits, the actuary can determine what amount BBT should set aside as readily available cash and reserves.

Allocation — The transaction that takes place daily and during which a participant’s contributions and accumulations are distributed to one or more of the investment funds in accordance with participant instructions. Allocations reflect units at the value established at market close on the previous business day.

Annuitant — A participant or surviving spouse who is receiving a monthly payment for life from the Pension Plan.

Annuitize — To transfer all or a portion of a participant’s monies held in the Active Lives Account into the Retirement Benefits Fund to fund that participant’s annuity.

Annuity — A monthly payment for life. It is possible for the payment amount to change. These requirements are described in your employer’s Adoption Agreement if your employer has elected this option.

Assumed earnings factor — The earnings that BBT expects to generate from the monies transferred from the Active Lives Account into the Retirement Benefits Fund to fund your annuity, usually expressed as an interest rate.

Assured return — An amount based upon a participant’s employee subaccount. The participant and/or the participant’s beneficiary/beneficiaries will receive all of these remaining monies, if any.

Automatic Enrollment —- An employer may elect to automatically enroll eligible employees in the Plan, and provide for annual automatic escalations of the employee’s contributions to the Plan. This is formally called Eligible Automatic Contribution Arrangement.

Basic contributions — Contributions that your employer elects to make to the Pension Plan on your behalf. Your employer’s Adoption Agreement indicates whether your employer makes basic contributions and, if so, how much those contributions will be.

Beneficiary — The person or people, trust, charitable organization, or estate you designated to receive your benefit from the Plan when you die. See the section entitled Selecting a Beneficiary for more information.

Defined contribution plan — A retirement plan under which the participant’s benefits are based on the contributions and the investment return on these contributions.

Direct transfer — The movement of retirement assets from one eligible plan directly to another. A direct transfer does not incur taxes or penalties.

Eligible Automatic Contribution Arrangement — See Automatic Enrollment.

Eligible plan — An eligible plan includes a retirement plan that meets the requirements of section 401(a) or 403(b) of the Internal Revenue Code, a governmental plan that meets the requirements of section 457(b) of the Internal Revenue Code, or an IRA.

Employee contributions — Employee contributions include Tax-Sheltered Contributions, Tax-Paid Contributions, Roth Contributions, Rollover Contributions, and Transfer Contributions. All employee contributions are deposited in the participant’s employee subaccount. Note: Rollover Contributions are not eligible for Annuitization.

Employee subaccount — The portion of the Plan account that includes all employee contributions that the participant has personally contributed to the Plan, plus the investment returns on this amount.

Employer contributions — Employer basic contributions and/or matching contributions that are contributed to the Plan by your employer on your behalf and deposited in an employer subaccount in your name.

Employer subaccount — The portion of your Plan account that includes all employer contributions made on your behalf by your employer and the investment return on these contributions.

Employer’s Adoption Agreement — The agreement your employer executes with BBT that stipulates certain Plan features and becomes part of the Legal Plan Document, which describes and defines the Plan’s rules and guidelines. Each Pension Plan employer can establish its own additional conditions to the Plan that apply to all of its employees in addition to all the Plan provisions.

Hardship withdrawals — A special type of withdrawal from contributions in a participant’s employee subaccount (not including any earnings thereon). See the section entitled Hardship Withdrawals for more detailed information.

IRS Form 1099-R — The form used to report Plan distributions from the Plan to its participants. Copies are sent to the participant and the IRS.

Inactive participant — A former employee of a Church of the Brethren congregation, agency, or affiliated organization whose Active Lives account no longer receives a routine contribution from either the employer or the employee.

Investment funds — The stock, bond, cash, and alternative funds managed and made available by BBT in which participants invest their contributions.

Investment returns — The earnings or losses on investments.

Loans — a withdrawal type available to you if your employer has elected this option.

Matching contributions — Contributions that an employer elects to make on a participant’s behalf. This type of contribution is made only if the participant makes Tax-Sheltered Contributions to the Plan. The employer’s Adoption Agreementprovides information on whether an employer will make matching contributions and, if so, how much those contributions will be.

Non-vested — Having not yet attained the right to receive retirement benefits as outlined in each employer’s Adoption Agreement.

Pension Plan or Plan — Church of the Brethren Pension Plan, a ministry of Church of the Brethren Benefit Trust Inc., which was established by the Church of the Brethren Annual Conference in 1943.

Periodic Payment — A flexible payment option. Your account remains in the Active Lives Account while you receive periodic payments from your employer and/or employee subaccounts.

Plan account or account — The total of a participant’s employee contributions and employer contributions, plus investment returns on all contributions.

Plan document — The legal document that governs the administration of Brethren Pension Plan.

Plan employer — An agency, organization, or congregation that provides Brethren Pension Plan retirement benefits to its employees.

Portfolio — A group of assets, such as stocks, bonds, and mutual funds, that is held by an investor.

Retirement Benefits Fund — The portion of Plan assets maintained by BBT for participants who are receiving annuities from the Plan. A participant’s accumulations that are to be annuitized are transferred to this fund.

Rollover — A distribution from one eligible plan that is transferred to another eligible plan, either through a direct plan-to-plan transfer or by a plan participant within 60 days after receiving the distribution. Only the participant’s employee subaccount is eligible to be rolled over from the Plan. See the section titled Direct Rollovers and Mandatory Withholding for more information.

Rollover Contributions — Contributions made by a participant to this Plan after receiving a distribution from another eligible retirement plan. See the section titled Rollover and Transfer Contributions for more information.

Note: Rollover Contributions are not eligible for annuitization.

Roth Contributions – Contributions that the participant elects to make to the Plan on an after-tax basis. See the section titled Employee Contributions for more information.

Safe Harbor Contributions — If an employer has elected a Safe Harbor Plan, the employer must satisfy one of the safe harbor contribution requirements as outlined in the Legal Plan Document.

Segregate — When a Plan participant divides his or her Plan Account into two separate accounts. This can occur when the Plan participant and his or her spouse divorce. This can also occur when an individual marries prior to the commencement of benefit payments and requests in writing that the single account is segregated from future contributions as a married person.

Surviving spouse — The widow or widower of a deceased Plan participant. The surviving spouse is automatically the deceased Plan participant’s primary beneficiary. Proof of marriage is required.

Surviving spouse option — A choice from among several annuity options that allows a specific amount of the annuity to continue to be paid to the surviving spouse. See the section titled Surviving Spouse Options for more information.

Tax-Paid Contributions — Contributions that the participant has elected to make to the Plan on an after- tax basis. See the section titled Employee Contributions for more information. Note: The Tax-Paid contribution option is closed for future contributions.

Tax-Sheltered Contributions — Contributions that the participant elects to make to the Plan on a pre-tax basis. See the section titled Employee Contributions for more information. 

Total Disability — Total disability will mean you have been determined by the Social Security Administration to be disabled. For a participant who has opted out of Social Security, total disability will be based on medical evidence submitted to the Plan.

Transfer Contributions — A contribution made to this Plan by way of a transfer directly from another 403(b) provider, without the transferred amount having been first distributed to the participant. See the section entitled Rollover and Transfer Contributions for more information.

Unit — A measure of ownership and performance in the Plan’s various investment funds.

Vested — Having attained the right to receive benefits as outlined in the participant’s employer’s Adoption Agreement.

Joining the Plan

Receiving your Retirement Benefit

Contributions

Withdrawals

Investments

Plan Facts

Other Plan Provisions

Glossary

Building financial security

Bettering the world

Together

Brethren Benefit Trust provides retirement benefits, health and welfare benefits, asset management, and financial advocacy to pastors, employees, and members of the greater Church of the Brethren community.

Since it began as the Pension Board in 1943, BBT has been called to serve its members and clients, and we are thankful for that opportunity.