Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) – United States federal legislation designed to increase tax revenues through a variety of means such as restrictions on the tax deductibility of certain investments, including some life insurance and pension products, and the elimination of distinctions in tax law applicable to partnerships and sole proprietorships.

Third-Party Administrator (TPA) – An organization that administers an insurance contract for a self-insured group but that does not have financial responsibility for paying claims. The self-insured group pays its own claims.

Top Hat Plan – A plan maintained by an employer primarily to provide deferred compensation for highly compensated employees or certain members of upper management.

Tort – A civil wrong, other than a breach of contract, for which a court of law will afford legal relief, i.e. harming another by an act of negligence in driving an auto.

Total Compensation – The aggregation of all wages, salaries and other cash payments and employer payments for employee benefits.

Total Disability – An illness or injury which prevents an insured person from continuously performing every duty pertaining to his/her occupation or engaging in any other type of work. (This wording varies among insurance companies.)

Triple-Option – Insurance plans offering three options from which an individual may choose, usually: traditional indemnity, HMO and PPO.

Trust – A legal instrument allowing one party to control property for the benefit of another.

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 Plan – A pension plan under which employer and employee contributions are forwarded to a trustee, who is responsible for investing the contributions and is often responsible for making benefit payments to plan participants. The duties of the trustee, who may be an individual or an institution such as a bank trust department, are spelled out in a trust agreement. A trustee generally does not guarantee that the trust fund will be adequate to pay current and future pension benefits.

Trusted Pension Plan – A pension plan in which the plan sponsor chooses a trustee to be responsible for investing the plan’s assets or for choosing an investor for the plan’s assets. Also know as a pension trust.

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