there are two types of pension plans: defined benefit plans and defined contribution plans. A defined benefit plan promises participants a specified monthly benefit at retirement. The plan may state this promised benefit asan exact dollar amount, suchas $100 per month at retirement. Or, more commonly, it may calculate abenefit through a plan formula that considers such factors as salary and service -for example, 1 percent of average salary for the last 5 years of employment for every year of service with anemployer.
A defined contribution plan, on the other hand, does not promise a specific amount of benefits at retirement. In these plans, the participant or the employer (or both) contribute to the participant's individual account under the plan, sometimes at a set rate, such as 5 percent of their earningsannually. These contributions generally are invested on the participant's behalf. The participant will ultimately receive the balance in their account, which is based on contributions plus or minus investment gains or losses. The value of the account willfluctuate due to changes in the value of investments. Examples of defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans, and profit-sharing plans. The general rules of ERISA apply to each of thesetypes of plans, but some special rules also apply.
A money purchase pension plan is a plan that requires fixed annual contributions from an employer to a participant's individual account. Because a money purchase pension plan requires these regular contributions, the plan is subject to certain funding and other rules.
Thursday, 15 November 2012
Fuction of ERISA
Requires plans to provide participants with information about the plan including important information about plan features and funding. The plan must furnish some information regularly and automatically. Some is available free of charge, some is not.
*. Sets minimum standards for participation, vesting, benefit accrual and funding. The law defines how long a person may be required to work before becoming eligible to participate in a plan, to accumulate benefits, and tohave a non-forfeitable rightto those benefits. The law also establishes detailed funding rules that require plan sponsors to provide adequate funding for your plan.
*. Requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.
*. Gives participants the right to sue for benefits and breaches of fiduciary duty.
*. Guarantees payment of certain benefits if a definedplan is terminated, througha federally chartered corporation, known as the Pension Benefit Guaranty Corporation.
*. Sets minimum standards for participation, vesting, benefit accrual and funding. The law defines how long a person may be required to work before becoming eligible to participate in a plan, to accumulate benefits, and tohave a non-forfeitable rightto those benefits. The law also establishes detailed funding rules that require plan sponsors to provide adequate funding for your plan.
*. Requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.
*. Gives participants the right to sue for benefits and breaches of fiduciary duty.
*. Guarantees payment of certain benefits if a definedplan is terminated, througha federally chartered corporation, known as the Pension Benefit Guaranty Corporation.
What is Employment Retirment Income Security Act? (ERISA)
The Employee Retirement Income Security Act of 1974,or ERISA, protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire.
ERISA is a federal law that sets minimum standards for pension plans in private industry. For example, if an employer maintains a pension plan, ERISA specifies when an employee must be allowed to become a participant, how long they have to work before they have a non-forfeitable interest in their pension, howlong a participant can be away from their job before it might affect their benefit, and whether their spouse has a right to part of their pension in the event of their death. Most of the provisions of ERISA are effective for plan years beginning on or after January 1, 1975.
ERISA does not require any employer to establish a pension plan. It only requires that those who establish plans must meet certain minimum standards. The law generally does not specify how much money a participant must be paid as a benefit.
ERISA is a federal law that sets minimum standards for pension plans in private industry. For example, if an employer maintains a pension plan, ERISA specifies when an employee must be allowed to become a participant, how long they have to work before they have a non-forfeitable interest in their pension, howlong a participant can be away from their job before it might affect their benefit, and whether their spouse has a right to part of their pension in the event of their death. Most of the provisions of ERISA are effective for plan years beginning on or after January 1, 1975.
ERISA does not require any employer to establish a pension plan. It only requires that those who establish plans must meet certain minimum standards. The law generally does not specify how much money a participant must be paid as a benefit.
List of Banks in India
Allahabad Bank - Allahabad Bank is over 125years old bank in India. It is headquartered in Calcutta. It is a profitable and professional nationalised bank.
*. Bank of Baroda - Bank of Baroda which set on sail in a small country craft in 1908 from a small town of Baroda, is today catering to the high seas as the flagship of Indian Banking Industry. Having weathered many a storm during its 91 year long voyage, the bank is continuing its quest for excellence through exploring new horizons of banking.
*. Bank of India
*. Bank of Madura - An innovative high-tech oriented Bank on the high growth path yet maintaining its traditional strength of better, knowledgeable customet service with personal touch.
*. Corporation Bank - Corporation Bank is a leading Public sector Bank in India offering a full range of Banking services.
*. Dena Bank
*. Federal Bank
*. ICICI Bank's - ICICI Bank has been promoted by ICICI, India's premier financial institute. The site istargeted at Non Resident Indians
*. idbi - Industrial devolopment bank of india.
*. SBI - State Bank of India - The State Bank of India is the oldest and largest commercial bank in India, with its presence covering all time zones in the world. SBI has a network which extends to every nook and corner of India, with a spread of more than 8700 offices across the country. Its foreign network comprises of 50 offices in 34countries.
*. UTI BANK LTD. - UTI Bank is among the first private sector banks in India. Sincethe commencement of its operations in 1994, the Bank has grown to be highly competitive in termsof its products and services.
*. Vysya Bank Ltd. - The largest private sector bank with a wide network and with a technology driven products.
*. Bank of Baroda - Bank of Baroda which set on sail in a small country craft in 1908 from a small town of Baroda, is today catering to the high seas as the flagship of Indian Banking Industry. Having weathered many a storm during its 91 year long voyage, the bank is continuing its quest for excellence through exploring new horizons of banking.
*. Bank of India
*. Bank of Madura - An innovative high-tech oriented Bank on the high growth path yet maintaining its traditional strength of better, knowledgeable customet service with personal touch.
*. Corporation Bank - Corporation Bank is a leading Public sector Bank in India offering a full range of Banking services.
*. Dena Bank
*. Federal Bank
*. ICICI Bank's - ICICI Bank has been promoted by ICICI, India's premier financial institute. The site istargeted at Non Resident Indians
*. idbi - Industrial devolopment bank of india.
*. SBI - State Bank of India - The State Bank of India is the oldest and largest commercial bank in India, with its presence covering all time zones in the world. SBI has a network which extends to every nook and corner of India, with a spread of more than 8700 offices across the country. Its foreign network comprises of 50 offices in 34countries.
*. UTI BANK LTD. - UTI Bank is among the first private sector banks in India. Sincethe commencement of its operations in 1994, the Bank has grown to be highly competitive in termsof its products and services.
*. Vysya Bank Ltd. - The largest private sector bank with a wide network and with a technology driven products.
Oil giant BP has agreed to pay the largestcriminal penalty in U.S.
WASHINGTON Oil giant BP has agreed to pay the largestcriminal penalty in U.S. history for the 2010 oil spill in the Gulf of Mexico, a source close to the case confirmed to CBS News Thursday.
Attorney General Eric Holderis in New Orleans and is expected to announce the plea agreement at a press conference later Thursday, CBS News reports.
The largest previous corporate criminal penalty assessed by the Department of Justice was the $1.2 billionfine imposed on drug makerPfizer in 2009.
BP has booked provisions of$38.1 billion to cover its liabilities from the incident, but the company has said the final cost remained highly uncertain. BP also recently announced that it expects to make the final payment this year to a $20 billion trust fund to cover damage from the blowout.
The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the April 20,2010, explosion that killed 11 people. The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.
BP Stirs Up U.S.- Brit Backlash
Attorney General Eric Holderis in New Orleans and is expected to announce the plea agreement at a press conference later Thursday, CBS News reports.
The largest previous corporate criminal penalty assessed by the Department of Justice was the $1.2 billionfine imposed on drug makerPfizer in 2009.
BP has booked provisions of$38.1 billion to cover its liabilities from the incident, but the company has said the final cost remained highly uncertain. BP also recently announced that it expects to make the final payment this year to a $20 billion trust fund to cover damage from the blowout.
The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the April 20,2010, explosion that killed 11 people. The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.
BP Stirs Up U.S.- Brit Backlash
Texas Instrument plans to cut 1,700 Jobs,
Feeling the pain from the slumping semiconductor market, Texas Instruments ( TXN ) disclosed plans on Wednesday to cut about 1,700 jobs in an effort to generate annual savings of$450 million.
The chip maker said it plans to take total charges of about$325 million, mostly in the fourth quarter, to pay for therestructuring.
TI said the move is part of management’s efforts to focus the company’s OMAP processors and wireless connectivity solutions on a broader set of applications with long life cycles. That marks a shift from TI’s historical focus on the mobilemarket, which has been hit by shrinking demand as smartphone makers increasingly build their own chips.
“Momentum is already building with new embedded applications and a broad set of customers, andwe are accelerating our efforts in these areas," Greg Delagi, senior vice president of TI’s embedded processing business, said in astatement. "These job reductions are something wedo with a heavy heart because they impact people we care deeply about.”
TI didn’t specify when the job cuts will occur but said it expects the reductions to take place around the world.
The company estimates the cost-cutting will create annual savings of about $450million by the end of 2013.
The moves come just weeks after TI reported weaker-than-expected third-quarterearnings growth of 30% and a 2% dip in sales to $3.39 billion. TI also released fourth-quarter earnings guidance that would badly miss Wall Street’s estimates.
TI said that profit outlook didn’t reflect the anticipated$325 million in restructuring charges announced on Wednesday.
The chip maker said it plans to take total charges of about$325 million, mostly in the fourth quarter, to pay for therestructuring.
TI said the move is part of management’s efforts to focus the company’s OMAP processors and wireless connectivity solutions on a broader set of applications with long life cycles. That marks a shift from TI’s historical focus on the mobilemarket, which has been hit by shrinking demand as smartphone makers increasingly build their own chips.
“Momentum is already building with new embedded applications and a broad set of customers, andwe are accelerating our efforts in these areas," Greg Delagi, senior vice president of TI’s embedded processing business, said in astatement. "These job reductions are something wedo with a heavy heart because they impact people we care deeply about.”
TI didn’t specify when the job cuts will occur but said it expects the reductions to take place around the world.
The company estimates the cost-cutting will create annual savings of about $450million by the end of 2013.
The moves come just weeks after TI reported weaker-than-expected third-quarterearnings growth of 30% and a 2% dip in sales to $3.39 billion. TI also released fourth-quarter earnings guidance that would badly miss Wall Street’s estimates.
TI said that profit outlook didn’t reflect the anticipated$325 million in restructuring charges announced on Wednesday.
Starbucks Buys Teavana for$620M
Furthering its reach in the multi-billion-dollar specialty tea market, Starbucks ( SBUX ) on Wednesday said it is buying Teavana ( TEA ) for about $620 million in cash.
Teavana shareholders will receive $15.50 per share in cash.
Starbucks said the purchase of Teavana, which makes more than 100 varieties of premium loose-leaf teas, other artisanal teaware and related merchandise, propelsit deeper into the $40 billiontea market.
“We believe the tea category is ripe for reinvention and rapid growth,” Starbucks CEO Howard Schultz said in a statement. “The Teavana acquisition now positions us to disrupt and lead, just as we did with espresso startingthree decades ago.”
Investors seemed slightly less optimistic on the deal and pushed Starbucks’ shares down more than 2% to $49.31 shortly after the announcement. Teavana's stock soared more than 52% to $15.42.
The Teavana brand adds to Starbucks existing Tazo brand and Schultz said it gives the café operator an opportunity to create a two-tiered market position, dominating globally both coffee and tea, two of the world's biggest beverage markets.
Teavana’s 300 mall-based stores and global sourcing capabilities and merchandising will add to Starbucks' existing infrastructure. Starbucks said it intends to grow the number of Teavana retail stores and add a “high-profile neighborhood store concept,” which it is hoping will expand the tea brand’s domestic and global footprint.
In a partnership through Starbucks’ joint venture partner Alshaya, Teavana recently opened its first storein the Middle East and has plans to enter new, high-consumption tea markets around the world, the companies said in a joint statement.
Starbucks’ president of channel development and emerging brands, Jeff Hansberry, who will head the new subsidiary, said the acquisition provides Starbucks with new channelsof distribution and strengthens its core offerings.
The Seattle-based coffee company expects Teavana to be accretive to earnings by about a penny a share in fiscal 2013.
Teavana shareholders will receive $15.50 per share in cash.
Starbucks said the purchase of Teavana, which makes more than 100 varieties of premium loose-leaf teas, other artisanal teaware and related merchandise, propelsit deeper into the $40 billiontea market.
“We believe the tea category is ripe for reinvention and rapid growth,” Starbucks CEO Howard Schultz said in a statement. “The Teavana acquisition now positions us to disrupt and lead, just as we did with espresso startingthree decades ago.”
Investors seemed slightly less optimistic on the deal and pushed Starbucks’ shares down more than 2% to $49.31 shortly after the announcement. Teavana's stock soared more than 52% to $15.42.
The Teavana brand adds to Starbucks existing Tazo brand and Schultz said it gives the café operator an opportunity to create a two-tiered market position, dominating globally both coffee and tea, two of the world's biggest beverage markets.
Teavana’s 300 mall-based stores and global sourcing capabilities and merchandising will add to Starbucks' existing infrastructure. Starbucks said it intends to grow the number of Teavana retail stores and add a “high-profile neighborhood store concept,” which it is hoping will expand the tea brand’s domestic and global footprint.
In a partnership through Starbucks’ joint venture partner Alshaya, Teavana recently opened its first storein the Middle East and has plans to enter new, high-consumption tea markets around the world, the companies said in a joint statement.
Starbucks’ president of channel development and emerging brands, Jeff Hansberry, who will head the new subsidiary, said the acquisition provides Starbucks with new channelsof distribution and strengthens its core offerings.
The Seattle-based coffee company expects Teavana to be accretive to earnings by about a penny a share in fiscal 2013.
Real Estate Investment Trust (REIT)
Real Estate Investment Trust (REIT) – An organization similar to an investment company in some respects but concentrating its holdings in real estate investments. The yield is generally liberal since REITs are required to distribute as much as 90% of their income.
Record date
Record date – The date on which you must be registered as a shareholder of a company in order to receive a declared dividend or, among other things, to vote on company affairs.
Redemption price
Redemption price – The price at which a bond may be redeemed before maturity, at the option of the issuing company. Redemption value also applies to the price the company must pay to call in certain types of preferred stock.
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