Pension Knowledge
Answer: To be considered fully vested in either calpers or calstrs you must have a minimum of this many years of service
Question: What is 5 years?
Answer: Withdrawals from a non-qualified annuity are taxed under this accounting method.
Q: What is LIFO (last-in, first-out)?
Answer:If fewer than 35 years of earnings are present, this value is substituted into the calculation.
Question: What are zeros?
Answer: MEC distributions are taxed under LIFO and subject to this additional penalty if under age 59½.
Question: What is a 10% penalty?
Answer: This type of risk affects the entire market and cannot be diversified away.
Question: What is systematic risk?
Answer: One standard equity option contract typically controls this many shares.
Question: What is 100 shares?
Answer: Retiring from both CALPERS and CALSTRS at the same time is known as this
Question: What is concurrent retirement or Reciprocity
Explain what this is (minimum 5 years in ONE system)
Answer: The portion of an annuity representing after-tax contributions is referred to as this.
Question: What is cost basis?
Answer: This indexed measure uses a worker’s highest 35 years of earnings to determine benefits.
Question: What is Average Indexed Monthly Earnings (AIME)?
Answer: Reductions in death benefit can retroactively trigger this classification of Life Insurance's tax status.
Question: What is MEC status?
Answer: This type of risk is specific to a company or industry and can be reduced through diversification.
Question: What is unsystematic risk?
Answer: This term describes an option with no intrinsic value.
Question: What is out-of-the-money?
Answer: This planning approach involves selecting a smaller survivor percentage while supplementing income with life insurance.
Q: What is pension maximization strategy?
Answer: Distributions taken before age 59½ may be subject to this additional IRS penalty.
Question: What is the 10% early withdrawal penalty?
Answer: Survivor benefits can begin as early as this age.
Question: What is age 60 (or 50 if disabled)?
Answer: The guideline premium test limits premiums relative to this policy component.
Question: What is death benefit?
Answer: Stocks, bonds, and cash are examples of these categories.
Question: What are asset classes?
Answer: This strategy involves owning stock and selling a call.
Question: What is a covered call?
Answer: This CalPERS benefit automatically continues to an eligible survivor regardless of the retirement option selected.
Q: What is Survivor Continuance?
***Must Bet points before revealing question ****DOUBLE JEOPARDY
Answer: Non-spouse beneficiaries must generally distribute the annuity under this timeframe unless annuitized.
Question: What is the 5-year rule (for NQ annuities)?
Answer: Remarriage before this age generally disqualifies someone from receiving ex-spouse benefits.
Question: What is age 60?
Answer: This catastrophic tax event occurs when a heavily loaned policy lapses.COLA increases are applied beginning in this month each year.
Question: What is phantom income recognition?
Answer: This metric represents a company’s total market value of its outstanding shares.
Question: What is market capitalization?
Answer: This strategy involves buying a call and a put at the same strike and expiration.
Question: What is a straddle?
Answer: RILAs may help investors stay invested by reducing this behavioral reaction during market downturns.
Question: What is panic selling?
Answer: This IRS code section limits the maximum annual defined benefit payable from a qualified pension plan like CalSTRS or CalPERS.
Question: What is IRC Section 415(b)?
Answer: This formula determines whether Social Security benefits are taxable.
Question:What is provisional income?
Answer: This type of policy loan credits interest to borrowed funds at a carrier-determined rate.
Question:What is a participating (direct recognition) loan?
Answer: This bias causes investors to fear losses more than they value gains.
Question: What is loss aversion?
Answer: This strategy involves selling a call and put at different strikes
Question: What is a short strangle?