A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Actuarial Assumptions - Factors which actuaries use in determining contingencies concerning future events affecting pension liabilities and costs, such as mortality projections, investment earnings and expenses, employee turnover, salary scales, etc.

Actuarial Equivalent - Equating the present value of one series of payments to another, taking into account specific mortality and interest assumptions.

Actuary - A technical expert in the methodology of determining premium, benefit reserves, funding and investment guarantees and other mathematical aspects of the pension business.

Annual Report - A published report providing the corporate organizational and financial conditions for the year and summarizing the company's goals and objectives.

Annuitant - The person upon whose life the annuity payments will be based. The annuitant is usually the payee.

Annuity - Periodic payments made to a retired Participant or other payee, payable under the provisions of the Group Annuity Contract, e.g., until death or for a specified period of time.

Application - That part of the Group Annuity Contract signed by the Contract Holder applying for the Contract.

B

Beneficiary - The person named by the Participant to receive any benefits due under the retirement plan subsequent to the Participant's death.

C

Certain & Continuous Annuity (C & C Annuity) - Provides lifetime annuity payments to the Annuitant. After payments begin, if the Annuitant dies before the selected certain period is over, payments in the same amount will continue to the Beneficiary for the rest of the certain period.

Certificate - Document provided to a Participant summarizing the terms under which a benefit will be paid in accordance with the provisions of Group Annuity Contract.

Commissions - Consideration to a John Hancock agent or to a duly licensed broker as a payment for services. Payment is usually a percentage of premium.

Confirmation Letter - A written acceptance by a prospective Group Annuity Contract Holder of a pricing offer or contract proposal made by the John Hancock. Usually, the letter includes a mutual agreement to execute a Contract.

Contingent Annuitant Option - Provides lifetime annuity payments to the Annuitant. Upon the Annuitant's death, the Contingent Annuitant, if still living, will receive payments for life. The amount of payments continued to the Contingent Annuitant may be 100%, 75%, 66 2/3%, or 50% of the amount of payments made to the Annuitant before death.

Contingent Annuitant - The person who is entitled to receive annuity benefits upon the death of the Annuitant.

Contract Holder - The entity or individual(s) to which a Group Annuity Contract is issued by the John Hancock.

Contributions - The premium deposits made under a Group Annuity Contract.

Cost of Living Adjustment - The periodic adjustment of an existing retirement benefit or annuity payment to reflect the variations in a specific index, such as the Consumer Price Index, or to reflect a specified increase under the terms of the contract.

D

Deferred Annuity - An annuity under which payment will begin at some definite future date, such as in a specified number of years, at a specified age (often 65), or when the Annuitant actually retires.

Deferred Compensation Plan - An employee benefit plan under which a Participant's compensation is deferred until retirement and is then payable as a retirement benefit. The compensation deferred is not taxed until the retirement benefits are paid.

Defined Benefit Plan - A retirement plan that provides for the payment of a definitely determinable retirement benefit. Contributions to the plan are actuarially determined to be whatever is necessary to provide the benefit.

Defined Contribution Plan - A retirement plan under which the level of contribution to the plan on behalf of each Participant is fixed and the amount of the Participant's benefit will vary dependent upon the amount of contributions and investment earnings on amounts held in the plan.

Department of Labor (DOL) - A federal agency created in 1913 to advance workers' welfare, working conditions and, in general, employment opportunities. The DOL has major responsibilities for enforcing ERISA.

Disability Benefit - The benefit payable under a retirement plan if a Participant becomes disabled prior to retirement. The standards for determining disability are defined in the retirement plan.

E

Employee Retirement Income Security Act (ERISA) - Extensive legislation enacted in 1974 which overhauled the private employee benefits system. Among other things, ERISA established reporting and fiduciary requirements, rules for participation, vesting and funding, Individual Retirement Accounts, guarantees for certain pension benefits, and the PBGC to oversee plan terminations.

Exclusion Ratio - Percentage used to determine the taxable and nontaxable portions of each annuity payment.

F

Fixed Annuity - An annuity that is payable as a stipulated dollar amount and that does not vary in amount once the payments commence. [See definition for Cost of Living Adjustments.]

401(k) Plan - A form of Deferred Compensation Plan which is qualified under section 401(k) of the Internal Revenue Code. A profit sharing or stock bonus plan which provides for contributions to be made pursuant to a "cash or deferral arrangement" under which a Participant may elect to take cash or defer contributions under the plan. Amounts deferred under the plan are excluded from the Participant's gross income and are generally paid out as retirement benefits. 401(k) plans often include matching employer contributions and are subject to limits on the amounts that may be deferred and contributed to the plan.

Full Cash Refund Annuity - Provides lifetime annuity payments to the Annuitant and includes a provision for a death benefit which may payable to designated beneficiaries. The amount of the death benefit will be equal to the excess, if any, of the purchase price of the annuity over the total of the annuity payments made to the Annuitant.

G

Group Annuity Contract (GAC) - A contract issued by the John Hancock that may be used as the funding instrument for pension plan benefits. In consideration of the payment of contributions (premium) by the Contract Holder, the John Hancock agrees to provide payment of benefits.

Single Premium Group Annuity Contract - A Group Annuity Contract under which all benefits (immediate and/or deferred) are purchased, and the entire cost for those benefits are paid on a single date specified under the Contract.

H

I

Immediate Annuity - An annuity without a deferral period. Payments begin within thirteen months of issue date of the Annuity Contract (usually shortly after the time the premium for the annuity is paid).

Internal Revenue Service (IRS) - The agency of the U.S. Government charged with the enforcement of the Internal Revenue Code.

J

Joint & Survivor Annuity (J&S) - Provides lifetime annuity payments to the Annuitant. Upon the death of either the Annuitant or the designated "joint annuitant", payments will be continued to the surviving joint annuitant based on the election made by the Annuitant. It may be 100%, 75%, 66 2/3% or 50% of the amount of payments made to the Annuitant before the death.

K

L

Life Annuity - Provides lifetime annuity payments to the Annuitant with no payments after death.

Lump Sum Distribution - The payment of a Participant's benefit under a retirement plan in a single sum. The amount paid is determined under the terms of the plan and often represents the actuarial equivalent ("current worth") of amounts payable or receivable in the future.

M

Master Terminal Funding Group Annuity Contract (Master GMIA) - A Group Annuity Contract that allows financial services firms to purchase annuities from the John Hancock on a group rate basis for their employee benefit program clients.

N

Normal Form of Annuity - The basic form of retirement benefit (e.g. life annuity with no death benefit) that is payable under a retirement plan if the Participant fails to elect an Optional Form of Benefit.

Normal Retirement Age - The age at which a Participant has the right to retire and receive immediate retirement benefits under the Plan's normal retirement formula. For most Plans, Normal Retirement Age is 65, with special requirements and benefit formulas for disability and early retirements.

Normal Retirement Benefit - The benefit a Participant is entitled to receive, in accordance with the Plan's benefit formula, if the Participant elects to retire at the Normal Retirement Age.

O

P

Participant - The person participating in a pension plan whose life expectancy is used to calculate the monthly benefit or premium amount on the Normal Retirement Benefit annuity. (Also referred to herein as the Annuitant in connection with a retirement plan benefit.)

Pension Benefit Guaranty Corporation (PBGC) - A corporation established by ERISA with the primary function to oversee ERISA's termination insurance program. The corporation will also review termination (complete or partial) of plans to determine adequacy of the plan's assets and will insure that the assets are allocated according to ERISA.

Pension Plan - An employee benefit plan which provides retirement income to Participants by means of advance funding or deferral of income. Pension plans are generally classified for benefit formula purposes as Defined Benefit Plans or Defined Contribution Plans, and for tax purposes as Qualified Plans or nonqualified plans.

Period Certain Annuity - Provides annuity payments to the Annuitant for the designated certain period only. After annuity payments begin, if the Annuitant dies within the designated certain period, payments in the same amount will continue to be paid to the designated beneficiary for the remainder of the certain period.

Plan Administrator - The person designated in a retirement plan as the person responsible to administer the Plan in accordance with the requirements of ERISA.

Proposal - The formal written presentation to a prospective Contract Holder outlining the John Hancock's guarantees or statement of services and the Hancock's offer to issue a Group Annuity Contract reflecting those terms.

Q

Qualified Domestic Relations Order (QDRO) - A court order instructing the Plan Administrator or the insurer that a portion of a Participant's retirement plan benefit is to be distributed in a certain manner. QDROs are usually issued in connection with divorce or custody proceedings and must meet requirements established by the Internal Revenue Code and enforced by the Department of Labor.

Qualified Pension Plan - A pension plan that satisfies all of the qualification requirements under the Internal Revenue Code, resulting in certain tax advantages to the employer and Participant.

Quotation (Quote) - A formal offer by the John Hancock to a prospective Contract Holder to provide fixed annuities for a fixed cost. The term also refers to Hancock's administrative service in providing a benefit amount estimate to individual Plan Participants or Annuitants ( a "Benefit Quote").

R

Retirement Dates - The dates when a Participant is eligible to retire in accordance with the provisions of the Plan, including early, normal and late retirement.

Rollover - The transfer of assets from one tax-qualified retirement plan to an individual retirement plan or to another tax-qualified plan, without incurring any tax liability. The amount, frequency and timing of tax-free rollovers are restricted under federal regulations.

S

State Premium Tax - A tax generally assessed by certain states at time of purchase with respect to annuities purchased for individuals residing within that state. The Premium Tax amount is a fixed percentage of the annuity's purchase price. The Premium Tax is paid as part of the purchase price of the Annuity.

T

Temporary Annuity - An annuity payable while a Participant lives but not beyond a specified period. No payments are made after the end of the stipulated temporary period or the death of the Annuitant.

Terminal Funding Group Annuity (TFA) - A Group Annuity Contract under which contributions are made only upon an individual Participant's retirement and in an amount sufficient to purchase the benefit.

Termination of Plan - Generally, the suspension or discontinuance of contributions and the cessation of benefit accruals under a qualified plan. The Internal Revenue Code and ERISA impose certain requirements that a qualified plan must satisfy upon plan termination.

U

Underwriter - The John Hancock staff member who (a) reviews the actuarial, legal and administrative soundness of a pension case; (b) coordinates the decision to accept, modify or reject any risk associated with the case; and (c) coordinates the issuance and servicing of the Group Annuity Contract within the Group Pension operation.

V

Variable Annuity - An annuity where the payments will vary according to changes in the investment experience of a fund or according to fluctuations of a specific investment index.

Vesting - A Pension Plan Participant attaining a nonforfeitable right to benefits funded by the employer. Plan benefits attributable to the Participant's own contributions are always nonforfeitable.

W

X

Y

Z