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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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Tactical Planning

Deals primarily with the implementation phase of the planning process.

Tag

A code within a data structure that gives instructions for formatting or other actions. World Wide Web documents are set up using HTML tags, which serve various functions such as controlling the styling of text and placement of graphic elements and providing links to interactive programs and scripts.

Take Home Pay

Pay actually received by an employee after adding on bonuses, but deducting taxes.

Target Benefits

Contributions are based upon an actuarial valuation designed to provide a target benefit to each participant upon retirement. The plan does not guarantee that such benefit will be paid, its only obligation is to pay whatever benefit can be provided by the amount in the participant's account.

Target Compensation

Expected pay for a job or position. This would include all avenues of compensation. (Base pay, incentives, bonuses, etc.)

Target Performance

Expected sales results.

Target Total Compensation

The complete cash compensation available to sales representative, for achieving sales goals.

Task

Actions to accomplish an objective.

Tax Deferred Annuity (Tda)

Offered by savings and loans, brokers and others, it offers high interest rates when the account is opened, but future interest rates are not guaranteed. Tax is deferred on the account until money is withdrawn.

Tax Equalization

A tax reimbursement system intended to ensure the expatriate neither gains nor loses, with regard to income tax, from undertaking an expatriate assignment. A hypothetical tax amount is deducted and the company then meets any additional host country tax liability on the entire package.

Tax Equity And Fiscal Responsibility Act Of 1982 (TEFRA)

Lowered limits on contributions and benefits for corporate plans. Allowed certain loans from plans to be treated as distributions. Reduced estate tax exclusion for retirement plan death benefits to maximum of $100,000. Repealed special Keogh plan and subchapter S restrictions. Added 'top-heavy' plan requirements. Stopped employers and health plans from forcing employees ages 65 to 69 to use Medicare rather than group health plan.

Tax Protection

Under this system, the expatriate pays no more in income tax than if they had remained at home, the company meeting the host tax bill in excess of the assumed home country liability. No hypothetical tax deductions are made, thereby allowing the expatriate to gain where the host country tax liability is lower than the home country assumed liability.

Tax Reform Act Of 1986

Dictated extensive changes in the law governing the qualifications of pension and profit sharing plans and the tax treatment of employers and employees. Imposed the comprehensive nondiscrimination rules of IRC Section 89.

Tax Sheltered Annuities (TSAs)

This describes special regulation under IRC Sections 501(c)(3) and 403(b) wherein employees of certain institutions may reduce their income by permitting the employer to pay part of their earned income into a deferred annuity.

Tax Sheltered Annuity (TSA)

This describes special regulation under IRC Sections 501(c)(3) and 403(b) wherein employees of certain institutions may reduce their income by permitting the employer to pay part of their earned income into a deferred annuity.

Taxable Benefits

In Canada, there are two criteria for determining if a benefit is taxable: (1) The person receiving the benefit must have received the benefit as part of the employment relationship. (2) The person must receive or enjoy the benefit.

Taxpayer Identification Number (TIN)

Your social security number (SSN) for yourself as an individual, or your employer identification number (EIN) for your business.

TCN

Third Country Nationals are citizens of one country who are employed by a company headquartered in a second country to work in a third country.

Telecommuting

Working at home by using a computer terminal electronically linked to one's place of employment.

Temporary Insurance Agreements

An agreement that provides temporary insurance for a short period of time, such as during the period in which regular insurance is being written.

Temporary Life Annuity

A series of payments, structured like an annuity that continues for a limited amount of time.

Ten-Day Free Look

Free Examination.

Term Insurance

Insurance in which the benefit is payable only if the loss occurs during a specific period of time.

Term Or Period Certain

A contract that provides an income for a specified number of years, regardless of life or death. If an annuitant dies, his or her beneficiary will receive payments for the remaining number of specified years.

Term Policy Dividend

A life insurance policy dividend option under which policy dividends are used as a net single premium to purchase one-year term insurance.

Termination Expenses

The cost of processing death benefit claims and cash surrenders.

Termination Indemnity

Obligation by law for payments on separation based on age, service or reason for termination.

Territory

Area a salesperson covers.

Testamentary Disposition

How the terms of a will divide the testator's (will writer's) estate, including specific gifts to named beneficiaries.

Third Country National (TCN)

Citizens of one country who are employed by a company headquartered in a second country to work in a third country.

Third Party Administration (TPA)

The party to an employee benefit plan that may collect premiums, pay claims and/or provide administrative services. Usually an out-of-house professional firm providing administrative services for employee benefit plans.

Third Party Administrator

The party to an employee benefit plan that may collect premiums, pay claims and/or provides administrative services. Usually an out-of-house professional firm providing administrative services for employee benefit plans.

Third Party Application

An insurance application submitted by a person or party other than the proposed insured.

Third Party Beneficiary

A person not a party to a contract, yet who has legally enforceable rights under the contract. Such a person might be a life insurance beneficiary, a mortgagee holding an assignment, or a member of a group insurance plan.

Third Party Endorsement

A method of marketing individual insurance to groups. In the third-party endorsement method, a life insurance company makes an agreement with an organization (such as a club, a business, or a professional association) to sell individual insurance to members or employees of the organization. The organization endorses the insurer's products, but the group members are free to buy the products or not.

Third Party Insurance

Insurance coverage applied for by someone other than the proposed insured.

Three Factor Contribution Method

A method for calculating policy dividends, considering separately the contributions arising from interest, mortality, and loading.

Threshold

A starting-point Example, on the threshold of a new career.

Thrift Plans

A defined contribution plan to which employees make contributions on an after tax basis, usually as a percentage of salary. The employer also makes incentive matching or partially matching contributions on behalf of the participating employees.

Tiered Pay Plan

A compensation system that distinguishes the salary based on time of hire, and work performance.

Time Off With Pay

Compensation that is paid to the employee, based on pay for holidays, vacation, sick leave, lunch periods, and other approved time off.

Time Span Of Discretion

A non-economic definition of job value.

Timing Of Payment

When payment is received early, current, or deferred.

Top Hat Plans

An unfunded deferred compensation plan or welfare plan that is maintained to provide deferred compensation for a select group of management or highly compensated employees.

Top Heavy Plans

A qualified plan in which the share of benefits allocable to key employees is more than 60%. The plan may be subject to special accelerated vesting provisions and minimum contribution rates.

Tort

A civil wrongdoing that creates a claim that’s to be tried in court before a jury.

Total Annual Cash Compensation

The sum of all cash payments made to an individual for services during a given year.

Total Compensation

The sum of all payments made to an employee for a specific time period (usually annual) including base salary, incentives, and bonuses (and/or other variable pay such as commissions).

Total Direct Compensation

In executive compensation, total annual cash compensation plus the annualized value of long-term incentives.

Total Needs Programming

A basis for selling life insurance in which the agent takes into consideration all the prospect's financial needs, calculates the amount of money required to take care of all those needs, determines the amount of money required to take care of all those needs, determines the amount of funds that will be available when the prospect dies, and calculates the amount of life insurance required to provide the difference.

Total Net Pay

The amount paid to an expatriate consisting of the sum of his or her base salary, expatriation premium and allowances less the tax equalization factor.

Total Payroll

The sum of wages paid at the opening of business on the first day of the plan year or the last day of prior year.

Total Remuneration

The sum of the financial and nonfinancial value to the employee of all the elements in the employment package.

Total Shareholder Return (TSR)

The total return of a stock to an investor (capital gain plus dividends).

Totalization Agreements

Social security arrangements between countries intended to protect the social security benefits of employees who move between countries and ensure single country social security coverages for employees on assignment.

Traditional Net Cost Method (TNC)

An insurance policy cost comparison method that is prohibited by the NAIC Model Life Insurance Solicitation Regulation primarily because it ignores the time value of money.

Transfer

A Transfer is the movement of an employee to a job having the same value as the one that was occupied at the time of the move. A transfer will typically not provide an adjustment in pay since it is a lateral, rather than an upward move as in a promotion.

Travel Accident Benefit

Health insurance policies that limit the payment of benefits to losses that result while traveling, usually by common carrier.

Treasury Shares

Common stock that has been issued and reacquired (purchased) by the corporation from the public at the current market price.

Treasury Stock Method

The method used in calculating diluted earnings per share whereby common stock equivalents such as unexercised stock options exist. Generally accepted accounting principles require that this method be used in calculating and reporting.

Tri-Modal

A distribution having three modes.

Triple Indemnity

A type of accidental death benefit coverage that pays an additional benefit equal to twice the policy's basic death benefit if the accident is sustained while the insured is a passenger in a public conveyance operated by a licensed common carrier, such as a bus, train, or airplane.

Trust Agreement

In a trusteed pension plan, the contract between the plan sponsor and the trustee that describes the trustee's authority and responsibilities for investing and administering plan assets. Trust agreements are also found when group insurance is provided through a multiple-employer trust (MET).

Trust Fund

Assets held in a trust.

Trust Fund Plan

A pension plan in which all contributions are sent to a trustee who then invests the contributions and makes any benefit payments.

Trusteed Pension Plan

A pension plan in which the corporation's contributions to the plan are placed in a trust for investment and reinvestment, as distinguished from a plan in which the benefits are secured by life insurance.

Trustees

A person, bank or trust company that has responsibility over financial aspects (receipt, disbursement and investment) of funds. Where a bank or trust company, a board of trustees does not exercise this responsibility in which the individual trustee has but one vote usually exercises it.

Twisting

In life insurance, inducing an insured through misrepresentation to drop an existing policy in order to take a similar policy from the selling agent. Twisting is cause for license revocation in most states and is an offense that is against the law in many states.