Abbott, Langer Association Surveys

Abbott-Langer & Associates Business Glossary

This glossary of business definitions contains over 2,000 business terms used in compensation and benefits administration. Continually updated, this specialized business dictionary focuses on definitions of Human Resources terms and business terms.

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Safe Harbor

Safe harbors are regulations that describe certain acts or behaviors, which are not illegal under a specific law, even though they might otherwise be illegal.

Safety Margin

In terms of life insurance, this is the amount the probability of mortality (per age) is increased by actuaries in mortality tables. The safety margin provides the insurance company with added security incase of an adverse experience.

Salaried

This is the compensation, which is received by an employee, weekly, monthly or yearly as opposed to an hourly pay. Typically, this applies to employees of higher levels with non-repetitive jobs that may or may not be supervisory in nature. These positions are exempt from the Fair Labor Standards Act provisions.

Salaried Sales Agents

These sales representatives are actual employees of the insurer and their compensation is typically a combination of a base salary plus commission. Salaried sales agents may work independently or they may work with other agents. They may make direct sales or they may promote the insurer's product by pitching sales to middlemen. May also be known as salaried sales representatives.

Salaried Sales Distribution System

A method of distribution method, which uses the salaried employees insurance companies to sell and to service insurance policies. Salaried sales staff may either work independently or they could work with agents and are frequently used for the distribution of organization insurance products.

Salary

This is the compensation, which is received by an employee, weekly, monthly or yearly as opposed to an hourly pay. Typically, this applies to employees of higher levels with non-repetitive jobs that may or may not be supervisory in nature. These positions are exempt from the Fair Labor Standards Act provisions.

Salary Budget

Money designated, over a specific amount of time, with which to pay salaries. When structure adjustments and or individual employee adjustments are being planned, the salary budget must be taken into consideration.

Salary Compensation

Cash payments made to an individual for services during a given year. These are payments made to employees in direct exchange for their contributions to an organization. They do not include bonuses, stock options, life insurance, 401(k) plans, or other benefits.

Salary Continuation Plan

A sick leave and or disability plan providing for employees to receive up to 100 percent of their salary for a certain amount of time, should they become sick or disabled.

Salary Increase

The difference between an organization's current pay and what it plans to pay in the future. Salary increases can be given based upon merit (such as pay for performance), cost-of-living increases, or matching what competing organizations pay. In the latter case, wage surveys are used to determine the amounts of salary increases.

Salary Increase Budget

Salary increase budget represents the difference, which exists, between a company's current pay and the goal it has or where it foresees its pay levels reaching in the future.

Salary Range

Usually used to determine individual employee pay, this term refers to range of rates, from the minimum to the maximum for a particular class or grade of employees.

Salary Reduction Plan

Salary reduction plans are ones in which deductions are made from the employees salary prior to the calculation of income for tax purposes.

Salary Structure

Usually established within an organization, this is the levels or hierarchy of job and pay ranges. The salary structure is also referred to as job grades, job-evaluation points and or policy lines.

Salary Structure Change

This term is employed to describe the adjustment of a wage structure. Typically, it is expressed as the average percentage change between the range midpoints of the old structure and the new structure.

Salary Surveys

Salary surveys are used by organizations to determine what the 'market rate' is for jobs or skills used in their organization. Paying a competitive wage is important for attracting and maintaining an adequate workforce.

Salary-Reduction Plan

This is available in most companies and is a system where the employee has to the option to ask pay-roll to reduce the his or her cash compensation and for the company to contributed the difference to the employee's pension plan, insurance plan or any other benefit plans available to employees.

Sale Of Stock

This is the exchange of shares in return for its cash value.

Sales

Money, which is generated by a company form the sale of their services or goods.

Sales Channel

A resource with which to access potential customers.

Sales Compensation

This is the amount, which is paid to members of the sales team of a company. This amount typically varies according to the degree to which individual representatives attained or surpassed their set goals.

Sales Compensation Plans

Sales compensation plans differ from the other types of compensation plans. Due to the fact that results are measurable in sales related jobs, compensation for those kinds of jobs are typically incentive (or commission) based. Compensation plans for sales type jobs may be fall into any of the following categories, Commission only, salary only plans, Commission-plus-draw plans, Salary-plus-commission plans, and or Salary-plus-bonus plans.

Sales Cycle

This is typically, the time from which a potential customer is identified and the time when the sale was closed.

Sales Illustration

Typically in graphic form, this is a tool used by agents to illustrate the benefits of the insurance policy he or she is trying to sell.

Salvage Value

The estimated value obtainable for an asset, which has passed its useful life.

Sample

In terms of statistics, this unit, which is representative of a class drawn from and studied in order to estimate the characteristics of an entire population. A random sample is where each member of the population has the same chance of being chosen. Convenience sample, on the other hand, is when units are selected, not at random but on the basis of what is easily available or accessible

Sampling Errors

These are possible errors, which may occur due to the lack of complete information in the analysis of jobs. May also be caused by the misinterpretation of data or answers to survey questions. May be due to bias or the misuse of procedures used in statistics.

Savings (Thrift) Plan

Set up by employers, this is plan established for the purpose of systematically providing for capital accumulation by employees, whereby the employees make a contribution and the employer matches the contribution according to a pre-established rate and limit. See 401(k).

Savings Bank Life Insurance (SBLI)

This is a type of life policy, which authorized savings banks sell to those who reside and or work within the state in which the policy is offered. Three states, in the United States, permit SBLI (Connecticut, Massachusetts and New York).

Scanlon Plan

This is a profit sharing program whereby employees share in pre-established cost savings, which are due to employee effort. Formal employee participation is necessary with the Scanlon Plan, as well as periodic progress reporting and an incentive formula, all of which are pre-established.

Scattergram

Also known as a scatter plot, this is a mathematical technique that displays a picture of the existing relationship between any two variable. It does this by plotting two (x,y) points.

Scheduled Dental Plan

This is a dental plan that pays fixed amounts of benefits for certain procedures according to a pre-established schedule. See also combination dental plan and unscheduled dental plan.

Scheduled Hours

This represents the number of hours that an employee is scheduled to work in a given work period as opposed to the number of hours actually worked.

Scope

A series of quantifiable job characteristics, ascribing value to certain jobs. The most common measures include asset size of the organization, sales volume, and number of subordinates and size of the managed budget.

Scope Data

These are particular numbers (usually sales or number of employees) used for selecting appropriate salary survey figures to determine going rates for a job or organization of jobs.

SEC

The SEC is the principal federal regulatory agency, which regulates the securities industry. The main function of the SEC is to promote full disclosure and it exists to protect investors, in the securities market, against practices that are fraudulent and or manipulative. SEC enforces several acts, including but not limited to the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940 and the Investment Advisers Act.

Sec Management Compensation Reporting

The annual reporting to the SEC by publicly traded corporations requires the reporting of the annual salary, bonus, and all other payments to the company's five top executive officers.

Secondary Source Of Job Information

This is a term employed, in job analysis, to describe any source of job related information other than the person whose job is being analyzed and or his direct supervisor.

Second-To-Die Life Insurance

Life insurance, which insures two people and the benefit is paid after the death of both participants. Typically, this is designed to make funds available to cover estate taxes. See survivorship life insurance.

Section 3460

In Canada, Section3460 of the Canadian Institute of Chartered Accounts (CICA) contain recommendations relating to employer's accounting for obligations and pension costs. The recommendation made by Section3460 is that, for defined benefit plans, the projected benefit method should be the determinant for pension costs for accounting purposes.

Section 401(K) Plan

In the United States, a deferred profit sharing and or stock-bonus plan permitting participants to decide the extent to which their compensation is deferred. Contributions of participant are not taxable until that time when the funds are withdrawn. Contributions of sponsor and investment earnings are both also tax-deferred. Also known as Cash or Deferred Arrangement (CODA).

Section 403(B) Plan

This is a type of retirement plan, typically established by certain tax-exempt organizations (i.e., charities, churches and hospitals). Section 403(b) plans are a creation of congress to serve as incentive to tax-exempt organizations, which ordinarily would not benefit from the tax advantages of qualified pension plans. The section 403(b) plan enables such organizations to offer their employees retirement compensation, albeit in a slightly different form. Educational organizations may also set up section 403(b) plans. May also be referred to as a tax-deferred annuity (TDA) plan or a tax-sheltered annuity (TSA) plan.

Section 415 Limits

This the limit imposed on the amount of annual contribution that can be made on the behalf of a participant of a defined contribution plan. There is also a limit placed on the amount of benefits payable to a participant of a defined benefit plan. These limits are set under Section 415 of the Internal Revenue Code. See contribution limit and maximum benefit.

Section 79

Section 79 of the Internal Revenue Code provides that employer contributions to purchase company term life policy receive preferential tax treatment. It also lists specifications that a plan is required to meet before being considered a nondiscriminatory organization term insurance plan for tax purposes.

Secular Trusts

A secular trust is a part of a nonqualified deferred compensation plan. In a secular trust, the employer contributes to an irrevocable trust to provide post-employment benefits to the executive. The executive has a nonforfeitable right to the assets of the trust at the time the trust is established however, the employee is not entitled to these assets until an event such as the employee's retirement, death, or termination of employment with the employer.

Securities And Exchange Commission (SEC)

The SEC is the principal federal regulatory agency, which regulates the securities industry. The main function of the SEC is to promote full disclosure and it exists to protect investors, in the securities market, against practices that are fraudulent and or manipulative. SEC enforces several acts, including but not limited to the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940 and the Investment Advisers Act.

Segmentation

This is when an insurer divides general investment accounts into parts, corresponding to the insurance company's prime lines of business.

Segregated Account

Known as and called a 'separate account' in America, this is the Canadian version. A segregated account is an asset account standing apart from the general account of a company.

Self-Administered

A type of benefit plan whereby the company is responsible for the administration of the plan in every way, including the administration of claims and the investment of assets.

Self-Administered Organization Insurance Plan

In this kind of organization insurance plan, the policyholder and not the insurance company performs the major part of the administrative work necessary for the plan. The policyholder keeps detailed records of organization membership, handles routine requests (e.g., for beneficiary changes and name and address changes etc.).

Self-Administered Trusteed Plan

This is a retirement plan whereby contributions for the purchase of pension benefits are made to a bank (known as the trustee), which in turn makes investments with the money and pays benefits to eligible employees from the monies accumulated and interests earned.

Self-Funding (Self-Insurance)

A method of funding a benefit plan, where the employer bears the risk for claims. An employer may contract, if it so wishes, with a third party for it to pay claims on the company's behalf.

Self-Insured Organization Insurance

A type of insurance whereby the organization sponsor and not an insurance company, has the responsibility for the payment of claims made by the insured parties. A company may be completely or partially self-insured. See also administrative services only (ASO) contract.

Self-Insured Plans

There are two parts of any insurance policy. (1) Risk assumption. (2) Processing of the claims. In self-insurance, the organization itself, takes on the risk of payment, typically by placing money that would have been paid as premiums into a fund with which claims are paid. Self-insured plans are usually taken on by very large organizations because it would take only one sizeable claim for a small fund to be wiped out.

Senior Professional in Human Resources (SPHR)

A designation for experienced HR professionals provided by the Human Resource Certification Institute (HRCI). See www.hrci.org for initial SPHR certification. The ERI Distance Learning Center provides SPHR recertification credits. See our Course Credit Map for a list of courses each approved for 1 SPHR recertification credit hour.

Seniority

Determined by the number of years that an employee has worked for a particular employer. Seniority is frequently the basis for benefits and privileges. The term is sometimes used to express the amount of time spent working for a division or in a specific occupation.

Separate Account

As its name implies, this is an account, which is separately maintained from the general accounts of a life insurance company. The separate account facilitates the management of the non-guarantee insurance product funds. The maintenance of separate accounts enables insurance companies to modify their investment strategies, while not adversely affecting general accounts funds. In Canada, this is known as segregated account. See investment-sensitive life insurance and general account.

Separate Account Contract

A pension plan funding channel, whereby the assets of the pension are invested through a separate account of the insurance company. This kind of insurance policy, typically does not offer any guarantees as to investment performance. May also be known as an investment facility contract.

Separate Health Benefit Account (401(H))

A method of funding used for health insurance benefits meant for retirees, which is either a part of defined benefit or a defined contribution plan but in which the funds for the health benefits are held separately.

Separate Lines Of Business

Organizations may seek to have different benefit plans for different segments of the company. They may do this by seeking to establish separate lines of business. This is done by identifying all the property and services provided to customers during the testing year and then designating which portion of the property and services is provided by each business. Employers may use their discretion to determine their lines of business in a manner that conforms to their business operations.

Separation From Service

Separation from service is a termination of employment for any reason other than a quit, discharge, retirement, or death, regardless of the duration of such absence.

Sequential Exercise

When an employee exercises stocks in the same order that he received them, it is known as 'sequential exercise'. Though, no longer applicable, this was a stock option incentive requirement.

Service Providers

Service providers are people such as lawyers, accountants, third party administrators, and actuaries. They are not fiduciaries as long as they stay within professional boundaries. However, fees paid to service providers must be reasonable compared to the services received.

Settlement

The word settlement may refer to various things. An action, revocable in nature, which relieves a plan sponsor of the obligation to pay pension benefit. See financial benefit.

Settlement Agreement

An arrangement between an insurance company and a policyowner (or beneficiary) relating to the method in which the insurance company will pay proceeds of the policy to the beneficiary. See settlement options.

Settlement Option Payments

Payments made, from time to time, by insurance companies, instead of lump sum payments of the proceeds of life insurance.

Settlement Options

These are the option given to Social Security Disability Income (SSDI) policyowners (or beneficiaries). In America, this is long-term income program for those who are disabled yet who are under 65 and who have paid a particular amount of Social Security tax for a specified amount of time.

Severance / Benefits Continuation

This is a term employed to describe the continuation of the salary of an employee after he or she has been terminated, which is paid either on a continuation basis or in a lump sum. The amount of the severance is typically contingent upon the length of time the employee served the company.

Severance Pay

In most countries, though not the U.S., severance pay is mandatory any time an employee is terminated. The purpose of severance pay is to soften the blow of unemployment, upon the termination of an employee. Typically, severance pay is equal to one week's pay for each year worked for the severing company (may be more and it may be less). In the U.S. severance pay is considered a welfare plans and is subject to the Employee Retirement Income Security Act's reporting, disclosure, and fiduciary standards. Severance payments are taxable to employees and usually are subject to federal income tax withholding and FICA.

Sex Discrimination / Sexual Discrimination

Gender is one of the protected groups under the Civil Rights Act. Thus gender, in and of itself, may not be used in a whole range of human resource decisions regarding employees. In addition, the Equal Pay Act prohibits paying men and women differently for the same or substantially similar jobs, and Title IX prohibits discrimination by gender in educational institutions.

Sexual Harassment

In the United States, Title VII prohibits two kinds of sexual harassment: quid pro quo and hostile work environment. When a quid pro quo case is proven, employers automatically are liable. Employers are liable only under certain circumstances when hostile work environment is proven. Quid pro quo cases require that the unwelcome sexual demand on the employee be made by someone with the ability to grant or deny an employee some benefit. Also, there must be a link between the demand for sex and the granting or denial of the benefit. Hostile work environment cases must involve pervasive, unwelcome sexually charged behavior that is directed toward an employee by someone in the workplace.

Shapes Of Distribution

This a term employed to describe data, as charted on a graph.

Shareholder

Several definitions: 1) In terms of corporations, a shareholder is an individual who owns shares (of stock) in a company. Ownership of shares of stock comes with the right to dividends when it is declared and voting rights in certain company matters (e.g., board of directors). (2) May also be an individual who owns shares in a mutual fund. Both my also be known as stockholder.

Shareholder Protection Formula

This is a formula used by companies and which is related to bonus plans whereby a pre-established percent of the profit is set aside to be distributed to shareholders, before any of it is made available to employees as bonus awards.

Shareholders' Equity

This is the amount with which a company's assets surpasses its liabilities. It represents the net-worth of a company, its true value. Also known as Net Worth.

Sherman Anti-Trust Act (1890)

This Federal law was enacted in order to protect the general public from corporate monopolies. This law has, since 1908 applied to Unions, who have used the statute to ensure that competitive wages are paid.

Shift Differentials

Applies to employees paid on an hourly basis. Hourly employees who are required to work hours that fall within a designated "second" or "third" shift typically receive differential pay (e.g., $.75 or $1.00) in addition to their hourly rate for the entire period that they are working on that particular shift. Differential pay is most commonly seen where the shift being worked is considered to represent a hardship, or if companies considered competitors offer similar compensation.

Note: Shift differential is paid to any hourly employee that works within the designated "second" or "third" shift regardless of whether it is their normal schedule or not.

Short-Form Reinstatement Application

This is an application designed to protect against the re-enrollment of insureds whose conditions have changed dramatically since the last due date of their premium. This application is typically used for reinstatements, which were requested within a relatively short period, (e.g., 30 to 90, days after the end of the grace period).

Short-Term Assignment (International)

A term employed by companies to describe assignments, which lasts over three months, known as 'business trip' but less than a year, known also as 'expatriate assignment'. The premiums which become payable varies from company to company.

Short-Term Disability Income Insurance

This is insurance that provides benefit for both short term and long-term (the first part of long-term) disability.

Short-Term Disability Plan

A benefit plan, whose goal is to provide income to employees who are absent from work either through illness or an accident but only when the employee is expected to return to his or her regular duties within a particular amount of time (typically 6 months).

Short-Term Incentives

Rewards, which are based on the achievement of short-term goals (typically 12 months or less).

SIC

The U.S. Standard Industrial Classification (SIC) system is a U.S. federally designed system that identifies companies by industry with a standard numbering system. It provides other information and is used by securities analysts, market researchers, and others. The SIC is being replaced by the North American Industry Classification System (NAICS). The current SIC Division Structure may be found online at www.osha.gov/cgi-bin/sic/sicser5.

Sick Leave

Sick leave means providing pay for employees when not working due to illness or injury. It may start on the first day of illness or after two or three days. In developing a sick leave policy the following points need to be considered: (1) When are employees eligible? (2) Will proof of sickness be required? (3) What pay schedule will be used and will the employee receive full pay? (4) How much sick leave can be accumulated and what is done about unused sick leave? (5) May sick leave be used for taking care of family members?

Simple Plan

First allowed in 1997, this is a kind of qualified retirement plan (IRA or 401(k)) for companies with over 100 employees.

Simplified Employee Pension (SEP)

This is a pension plan that an employer may make contributions retirement income to, using individual retirement annuities or accounts. Under the SEP employers may directly contribute directly to Individual Retirement Accounts, amounts, which have been deferred by employees. Typically the SEP is cheaper to operate and therefore most commonly used by employers who are unable to afford more complex pension plans.

Simultaneous Death Act

This law is typically enacted on a state or province level and it provides that, should the insured and the first beneficiary both die under such conditions that it is not possible to determine who died first, it will be deemed that the insured in fact survived the first (primary) beneficiary (unless there exists a clause in the policy to the contrary.

Single Premium Annuity

This is an annuity, which is purchased with a single, one time payment / premium. May also be known as an immediate or a deferred annuity.

Single Purchase Annuity Contract

This is an annuity, which is purchased with a single, one time payment / premium. May also be known as an immediate or a deferred annuity.

Single-Premium Deferred Annuity (SPDA)

This is an annuity, which is purchased with a single, one time payment / premium. May also be known as an immediate or a deferred annuity.

Single-Premium Method

This is an insurance premium payment arrangement for plans that are contributory in nature, where at the moment that the loan is granted, all the premium that will be due for the insurance is paid, up front / in a lump sum by the borrower or added to the principal amount of the loan. May be contrasted with monthly outstanding balance method.

Single-Rate System

This is a policy of compensation whereby employees are all paid at the same rate as opposed to being paid within a pay range. This is typical in a situation where the job being performed is so similar that there really isn't room for a wide range of skill level.

Six And Six Exclusion

This is a pre-existing condition exclusion clause typically found in credit disability insurance policies, which provides that a disability will not be covered if the party insured was treated for the disability during the six months preceding the effective date of the commencement of coverage. May frequently also provide that an insured party will not be covered if he or she becomes disabled from the same ailment / condition within six month post commencement of coverage date.

Skewed Distribution

This is a series of data that is plotted and non-symmetric in nature, which has a tail of extreme values going in a single direction.

Skill-Based Pay

This is a compensation system, which is based on the set of skills an employee has and is capable of using should the need arise (even though the employee may not currently be using the skill).

Skills Inventory

Typically used by employment agencies, personnel departments and contract programming companies who wish to set up and maintain a file for candidates and their associated qualifications. Once all the data is in place and information about a potential candidate is entered along with particular job requirements, then a search can be done for the candidate or candidates who meet the requirements.

Slope

The slope of the line represents how much each unit change of the independent variable X changes the dependent variable Y. The slope (m) tells you how hard it would be to run up the straight line, i.e. how steep it is. The larger "m" is, the steeper the slope. A perfectly horizontal line has a slope of zero. A line that makes a 45-degree angle with its base has a slope of 1.

Slotting

The process of placing a position / a job into a hierarchy of jobs using other methods of evaluating jobs. This process entails the comparison of one job to others, already exist in the hierarchy of jobs.

Small Business Job Protection Act (SBJPA)

This statute simplifies pension provision. SBJPA also extends the tax breaks provided by employers for educational assistance, increases the federal minimum wage, provides special rules on employee/independent contractor determinations, and allows employers to establish new qualified adoption assistance benefits for employees.

Small Estates Statutes

These statutes makes it possible for an insurance company to pay fairly small amount of the policy proceeds to an estate without having to get involved in court proceedings.

Small Organization Insurance Plan

A species of organization life insurance plan, which uses organization underwriting techniques but adds a certain degree of simplified individual underwriting and is designed to insure groups of 2 to 25 people. Also known as baby organization plan.

Small-Group Incentive

Any incentive plan, which focuses, primarily on the performance of a small group (typically a work team).

SOC

The SOC is a Canadian system used by statistical agencies to categorize workers into occupational groups so as to collect, calculate, and disseminate data. Workers will be grouped into a particular classification of occupation (of which there are over 820) depending on their definition. To make classification easier, occupations will be combined so as to form 23 main groups, 96 sub-groups and 449 broad categories of occupations.

Social Insurance Supplement Policy

This is medical expense insurance, which is sold to provide for benefits, which compliment that available from a determined government health insurance plan.

Social Security

Social Security is a federal government program that is part way between a tax plan and social insurance. Employers and employees pay payroll taxes to fund its two programs - Old Age Survivors' and Disability Insurance

Social Security Act

The Social Security Act is the Act passed in 1935 establishing the social security system in the United States.

Social Security Administration (SSA)

The Social Security Administration is the U.S. government bureau that administers the social security system. There are 12 regional offices, as well as offices in most major cities in the United States.

Social Security Level Income Option

Under this option, employees may chose to have monthly annuity payments (before the age of 62 or 65) increased actuarially and thereafter, that payments be decreased.

Social Security Tax

Generally known as FICA taxes, after the Federal Insurance Contribution Act, these taxes are imposed on wages paid to employees to fund Social Security benefits for employees. Both the employer and the employee must pay FICA tax on an employee's annual wages from the employer up to the Social Security taxable wage base. This tax is divided into 2 components: Medicare and the Old Age Survivors and Disability Insurance (OASDI) component.

Sole Proprietor

A sole proprietor is the 100% owner of a business, which is not incorporated.

Sole Proprietorship Insurance

This is a kind of life insurance on the life of the sole proprietor of a company. The purpose of this is to cover the cost of paying salary of the person employed to run the business after the owner of the company dies, is disabled or in to compensate the family of the owner for loss of possible / potential income, should the business fail after the disability or death of the sole proprietor.

Soliciting Agent

Insurance companies frequently work with a general agent or sometimes a branch manager. The soliciting agent actually makes contact with potential customers, collects the first premium payments and delivers policies. See Insurance agent.

Special Vocational Preparation (SVP)

The amount of time required by a typical worker to acquire skills for average performance. There are nine levels of time duration required by a typical worker to acquire skills for average performance in the subject position, 9 being the highest and 1 being the lowest. For more information on SVP, please refer to the Dictionary of Occupational TiItles or U.S. Department of Labor.

Special Work Location

Ordinarily, payment by the employer of room and board and/or transportation costs are considered taxable income. Exceptions may be made for special work locations and remote locations. In addition, those employees living in northern areas of Canada may be eligible for a tax deduction.

Specified Fringe Benefits

Benefit plans for specific purposes including group-term life, accident and health, group legal services, cafeteria plans, educational assistance programs, and dependent care assistance programs.

Spendable Income

This is the total income minus housing expenses, taxes, savings, and life insurance.

Split Credit

Credit is given to more than one individual.

Split Dollar Life Insurance

The employer and employee share in the expenses, equity and death benefits of the policy.

Split Funding

The use of two or more funding agencies for the same pension plan. An arrangement whereby a portion of the contributions to the pension plan are paid to a life insurance company and the remainder of the contributions are invested through a corporate trustee, primarily in equities.

Spot Awards

Spot Awards are a frequently administered “alternative pay” program for non-exempt and exempt non-management personnel. They are usually cash or gift awards delivered “on-the-spot” for extraordinary performance, completion of a project, and/or individual recognition. These awards are typically administered at the discretion of management.

Spouse And Children's Insurance Rider

An additional rider to the life insurance plan that covers a spouse and child.

Springing Rabbi Trust

Trusts might be 'springing,' meaning that assets are transferred to the trust upon a triggering event - usually a change of control.

Stacking

Not paying benefits under a public pension plan. When there is no integration of two plans- private and public. This is considered stacking.

Stakeholder

Any party that has an interest ('stake') in a firm.

Standard And Poors (S&P;)

Investment rating service.

Standard Deviation

The square root of the variance. A measure of dispersion of a set of data from its mean.

Standard Error Of Estimate

An estimate of the variability or random error of the sample to the population.

Standard Industrial Classification System (SIC)

This federally designed system identifies companies by industry with a standard numbering system. It provides other information and is used by securities analysts, market researchers, and others.

Standard Metropolitan Statistical Area (SMSA)

A central city area and its surrounding suburbs and small jurisdictions.

Standard Nonforfeiture Law

State law stating what the minimum benefits a life-insurance policy can have.

Standard Occupational Code (SOC)

The SOC is a Canadian system used by statistical agencies to categorize workers into occupational groups so as to collect, calculate, and disseminate data. Workers will be grouped into a particular classification of occupation (of which there are over 820) depending on their definition. To make classification easier, occupations will be combined so as to form 23 main groups, 96 sub-groups and 449 broad categories of occupations.

Standard Plan Termination

The termination of a plan that has sufficient funds to pay for any and all benefits the participants may be entitled to.

Standard Premium Rate

The premium rate for a person considered to be average in the chance of experiencing a loss.

Standard Rate

Designated rate for a specific job classification, established by evaluation or performance.

Standard Risk Class

In life and health insurance, a person entitled to insurance protection without extra rating or special restrictions, a risk meeting the same conditions as the tabular risks on which rates are based.

Starting Rate

Refers to the wage or salary to which an employee is assigned upon entering the job.

State Disability Insurance Program (SDI)

A plan for accident and sickness, or disability insurance required by state legislation of those employers doing business in that particular state.

State Unemployment Tax Act (SUTA)

The State Unemployment Tax Act (SUTA) provides that employers pay a payroll tax that supplies funds at the state level that are used to provide benefits for unemployed workers. The amount paid by the employer depends upon the experience of claims by former employees on the fund.

Statute Of Limitations

State law that sets a time limit within which legal action must be taken.

Statutory Accounting Practices (SAP)

Principles required by statute that must be followed by an insurance company when submitting its financial statements to the various state insurance departments. Such principles differ from the Generally Accepted Accounting Principles (GAAP).

Statutory Benefits

Benefits that are required by statutory law. In the United States, for example, workers' compensation, Social Security and unemployment insurance are required, benefits vary among countries. Companies operating in foreign countries must comply with host country compensation and benefits mandates.

Statutory Reserve

In insurance, especially life, a reserve, either specific or general, required by law.

Statutory Stock Options

Gives an employee a right to purchase company stock usually at a bargain price.

Step Rates

A method of calculating benefits by assigning a different value to income below and above a certain breakpoint, such as the Social Security level.

Stock

A certificate of ownership, a contract between the issuing corporation and the owner that gives the latter an interest in the management of the corporation, the right to participate in profits and, if the corporation is dissolved, a claim upon assets remaining from all debts that have been paid.

Stock Appreciation Rights (SAR)

An executive can receive the difference between the stock option price and current market price of the company's stock without buying any, often used in conjunction with an incentive stock option.

Stock Bonus Plan

A qualified defined contribution 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 Bonus Planning

A qualified defined contribution 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 Insurance Company

An insurance company that is owned by people who buy shares of the company's stock.

Stock Option

The right, but not the obligation, to buy company stock at a certain price within a particular period of time.

Stock Option Incentive

A special benefit that some companies offer to their employees to purchase stock at a fixed price. Companies usually award incentive stock options as a bonus for performance, or as an incentive to get you to work harder.

Stock Ownership

Consisting of one or more shares that have been purchased, which then entitles the owner to a share of the company, and declared dividends.

Stock Purchase Plan (Nonqualified)

A plan that allows senior management or other key personnel to purchase employer stock. Certain restrictions apply: (1) the stockholder must be employed for a particular length of time, (2) the employer has the right to buy back the stock and (3) stockholders cannot sell the stock for a specific time period. (Qualified) A program under which employees buy shares in the employer's stock. The employer contributes a certain 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.

Stock Repurchase Insurance

Insurance used to repurchase company stock from a deceased stockholder.

Stock Sale

When a buyer takes ownership, full, of the company entirely.

Stock Split

A division made of the capital stock of a corporation to create more shares, primarily to improve marketability and heighten investor interest. Stock splits are generally on a two-for-one basis (two shares of new stock are made exchangeable for one share of old).

Stock Swap

Allowing an executive to deliver already-owned stock, instead of paying cash, to exercise a stock option.

Stop-Loss Provision

An insurance provision stating that the insurance company will pay all expenses after a set amount of out-of-pocket expenses has been paid.

Straight Life Annuity

An annuity that lasts for the length of the annuitant's life and stops all payments at the time of death.

Straight Life Income Option

An insurance option that states that benefit payments will be made to the beneficiary until the beneficiary dies and that at that time all payments cease.

Straight Life Insurance

Whole life insurance on which premiums are payable for life.

Straight Line Depreciation

A method of calculating the depreciation of an asset, which assumes the asset, will lose an equal amount of value each year.

Strategic Business Unit (SBU)

Independent business unit within a company that markets its own products.

Strategic Planning

Determination of the steps required to reach an objective of achieving the optimum fit between the organization and the marketplace.

Strength Rating

The overall physical strength required to perform a job is expressed as a strength rating.

Strikes

To refuse to continue working because of an argument with an employer about working conditions, pay levels or job losses.

Subchapter S Corporation

This is a type of corporation, which does not have its gains taxed at the corporate level but rather the tax is passed down to the shareholders who then are required to report the gains on their individual tax returns.

Subject Matter Expert (SME)

An individual who shows a high degree of expertise at performing a job, task, or skill in an organization. For example, a customer service agent, account manager, or website programmer might qualify if the individual is an authority on the subject matter.

Subpoena / Subpeonas

To order (someone) to go to a court of law to answer questions or to order that (documents) must be produced in a court of law.

Subrogation

Taking over of a debt from the original creditor. In insurance, subrogation is the right of the employer or insurance company to recoup benefits paid to a participant through a legal suit, if the action causing the disability and subsequent expenses was the fault of another person.

Substandard Broker

A broker that specializes in substandard risk.

Substandard Premium Rate

A premium rate, generally higher than a standard premium, charged on a substandard risk.

Substandard Risk Class

A risk class with a greater chance of loss than the average person.

Successor Employers

A successor employer is one who has taken over the assets and liabilities of another company.

Successor Owner

A person designated to become the owner of a life insurance policy if the owner dies.

Suggestions Awards

Allows employees a monetary or incentive reward for company savings ideas or a unique idea.

Suicide Clause

An insurance provision that states that no benefits will be paid if the insured dies as a result of suicide. (This is often limited to a set period of time following the issue of the insurance policy.)

Summary Annual Reports (SAR)

Summaries report on the financial status of an employee benefit plan, must be given to participants.

Summary Plan Description (SPD)

A requirement of ERISA for a written statement of a plan in an easy-to-read form, including a statement of eligibility, coverage, employee rights and appeal procedure. It is provided to participants, beneficiaries and, upon request, the Department of Labor.

Superannuation

Plan or scheme that provides benefits in the event of retirement, death or disability. Can refer to private company plans as well as industry or union funds. Frequently used in British Commonwealth countries.

Superimposed Major Medical Plan

A medical plan used in conjunction with basic medical plans that provides coverage if expenses exceed what is covered by the basic plans.

Superintendent Of Insurance

The head of the Bureau of Insurance.

Supper Money

A fringe benefit for employees working overtime. It is a monetary allowance provided for an evening meal.

Supplemental Death Benefits (Supplemental Life Insurance)

This is an additional layer of coverage you may purchase to help financially protect your family if you die.

Supplemental Disability Benefits

A benefit provided that goes beyond the company provided disability plans.

Supplemental Executive Retirement Plan (SERP)

This is an additional layer of coverage you may purchase to help financially protect your family if you die.

Supplemental Long Term Disability Plans

A long-term disability that goes above and beyond the standard plan.

Supplemental Major Medical Insurance

This coverage is designed to insure expenses not covered by a basic medical plan. Covered persons are first reimbursed for their medical expenses under the employer's basic plan, usually with no deductible or co-payment applied, to the extent that the basic plan covers the expenses. Expenses not covered by the basic plan can be reimbursed under the supplemental major medical plan, usually after the satisfaction of a corridor type deductible. After the covered expenses exceed the deductible, the major medical plan takes over and typically pays a percentage, such as 80%, of the covered expenses in excess of the deductible amount. There frequently is a limit on the amount of covered expenses that are subject to a coinsurance provision, after which the covered expenses are reimbursed in full.

Supplemental Nurse

A Supplemental Nurse is employed by an agency and may work either short or long-term assignments in a hospital or other health care facility. Supplemental Nurses provide specific nursing skills and may be referred to as a “traveling nurse professional.” Pay rates for these positions are usually better than per diem or staff rates with flexibility in scheduling or shift preference.

Supplemental Organization Life Insurance

Additional life insurance that is purchased to provide benefit coverage beyond the company sponsored plan.

Supplemental Unemployment Benefits (SUB)

Amounts provided under a labor contract as additions or supplements to the unemployment compensation provided by law.

Supplemental Unemployment Compensation Benefits

Plan or scheme that provides benefits in the event of retirement, death or disability. Can refer to private company plans as well as industry or union funds. Frequently used in British Commonwealth countries.

Supplementary Benefit Rider

Benefits provided by a pension plan in addition to regular retirement benefits. Supplemental benefits vary according to the terms of a plan and include such items as the payment of benefits in the event of terminations, death, disability or early retirement.

Supplementary Contract

A document or rider attached to an insurance policy and made a part of it, providing for an additional benefit or some modification of a benefit already contained in the policy.

Supplementary Contract With Life Contiguous (WLC)

A supplementary contract or annuity in which the duration of the payment period depends on the lifetime of the beneficiary.

Supplementary Contract Without Life Contingencies

A supplementary contract or annuity where the proceeds of a life insurance policy are held at interest or paid in installments.

Supplementary Notice

The Fair Credit Reporting Act requires it. Notice to a consumer of the nature and scope of the investigation mentioned in the pre-notice form that an insurance company has sent to the client.

Supplementary Shift Bonus

A Supplementary Shift Bonus is sometimes used to reward employees who fill in for another employee who calls in sick.

Surgical Schedule

In a basic medical expense health insurance policy, the list of cash allowances that are payable for various types of surgery, with the respective maximum amounts payable based upon the severity of the medical procedure. The stipulated maximum usually covers all professional fees involved (e.g., surgeon, anesthesiologist).

Surplus

An excess amount. In financial terms, this is the remainder of assets left after debts, expenses, and liabilities are deducted.”

Surrender Charge

A charge for the cancellation of an insurance or annuity policy.

Surrender Cost Index (SCI)

In life insurance, a method of comparing costs of similar policies by using an index that takes into account the time value of money due at different times through interest adjustments to the annual premiums, dividends and cash value increases at an assumed interest rate.

Survey

An examination of opinions, behavior etc., made by asking people questions.

Surviving Spouse

A widow or widower.

Survivor Income Benefit

A type of group life insurance, which provides income benefits if a 'qualified survivor' survives the insured. Usually the qualified survivor category includes only the insured's spouse and children.

Survivorship Life Insurance

Life insurance covering two people that do not pay benefits until both have died.

SVP

Specific Vocational Preparation is defined as the time required by the average worker to acquire techniques and to gain the necessary knowledge and information in order to perform averagely in a particular job or work situation.