Adjusted invoices are not sent for TSA/FSA adjustments. For example, adjustments reported for May and received and entered after May 12th may not be reflected on the May invoice. The adjustment will be included on the following month’s (June) invoice as an over payment or underpayment. Adjustment invoices are sent only on request.
Yes, and this is an important distinguishing feature of the Annuity Plan. Twenty percent (20%) of employer contributions (along with 100% of personal or employee contributions) may be withdrawn in the form of a lump sum at that time. At annuitization, members must convert at least 80% of employer contributions to an annuity.
The Annuity Plan can best be described as the perfect combination of “defined contribution” and “defined benefit.” There is flexibility and choice during the accumulation phase (the defined contribution part), and the protection of lifetime income during the retirement phase (the defined benefit part). The retirement industry is grappling with ways to provide exactly what the Annuity Plan does. Unfortunately, defined contribution plans governed by ERISA are not permitted to “self-annuitize” the way the Annuity Plan and other denominational church plans do.
A defined contribution plan does not “define” the benefit but rather “defines” the contribution. Money is contributed to an account that grows with investment earnings during an individual’s working years. At retirement, a typical defined contribution plan (such as a 401(k)) allows for the complete or partial distribution of the account balance. Assets are not pooled and the individual is expected to “draw down” his/her own balance during retirement years. The obvious challenge is to achieve meaningful returns while taking monthly withdrawals and, all the while, not running out of money.
A defined benefit plan is a type of retirement plan that computes an annuity at retirement based on a formula that typically takes into account salary and years of service. The benefit is usually expressed (or “defined,” hence the term) in terms of an annual annuity payable at age 65. There may be other payout options and starting dates, which would require adjustment to the annual amount. The advantage of a defined benefit plan is that the annuities are “pooled” so that benefits can be paid for an individual’s lifetime without the risk of outliving one’s retirement savings.
