3 legal words of the day (26.10) 1. deficiency judgment = A judgment for the amount a homeowner owes the lender after a house or other asset is foreclosed upon and sold by the creditor for less than the actual debt (mortgage or car loan, for example) that is secured by the asset. In most states, the lender can file a separate lawsuit to recover a deficiency owed by the borrower. Some states restrict deficiency judgments after a home foreclosure. 2. defined benefit plan = A type of pension plan that promises a specific benefit upon retirement. The benefit may be a set amount (such as $1,000 per month) or may be calculated according to a formula based on, for example, years of service and average salary. 3. defined contribution plan = A type of retirement plan that creates an individual account for each employee funded by contributions by the employer, the employee, or both. The amount contributed is set, either as a dollar amount or by formula (for example, a certain percentage of the employees earnings). Unlike a defined benefit plan, which guarantees that the employee will be paid a certain amount on retirement, a defined contribution plan guarantees the employee only the value of his or her account upon retirement: amounts contributed to the plan plus or minus investment gains or losses. A 401(k) plan is a type of defined contribution plan.
Posted on: Sun, 26 Oct 2014 09:44:17 +0000
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