Glossary
1035 Exchange
Is an internal replacement function that permits the deferral and non-recognition of a taxable gain in a policy upon surrender. In effect a tax-free exchange of an existing annuity contract for a new one.
401(k) Plan
Is a qualified employment-based retirement savings plan established by employers that allows employees to make tax-deferred contributions from current earnings which additionally an employer may match on behalf of the employees. Employers may also add a profit-sharing feature to the plan.
403(b) Plan
A retirement savings plan, similar to a 401(k), for certain employees of charitable and educational organizations. Also known as a Tax-Sheltered Annuity (TSA) plan.
457 Plan
This is a non-qualified, deferred compensation plan, similar to a 401(k), for employees of state and municipal governments.
