DC acronyms: How to go from IDK to A-OK

Part of the Business of Retirement Series

DC acronyms: How to go from IDK to A-OK

Texting — we do it every day, but rarely stop to think about how revolutionary this technology really is. My son is deaf, and texting has changed the way he interacts with both the hearing world and within the deaf world. I have had more and better communication with my son since this technology change. But what I was not prepared for was the use of abbreviations and acronyms.

I quickly learned “LOL.” But to effectively text, I needed a resource to help me through this new language. Thanks to abbreviations.com, I now know that “143” means “I love you,” while “182” means “I hate you.” And, believe it or not, there are 79 meanings for “BBB” — I assumed it meant “Better Business Bureau,” but it can also mean “Blah, Blah, Blah” or “Busy Beyond Belief.” I looked at more than 1,000 different abbreviations before I stopped reading. The point is, there are more than most people can remember — although my son is close to knowing them all.

So what does this have to do with defined contribution plans? (Or, “DC plans,” of course.) Well, we live in a similar world of acronyms, abbreviations and terms not used in everyday life. We are expected to know the difference between a 3(16) Plan Fiduciary, a 3(21) Advising Fiduciary and a 3(38) Investment Manager — if your DC plan business is not the focus of your life, you may need help.

That is why we created the Invesco PlanForward retirement plan glossary. So if you do not know your 12b-1 fee from your wrap expense, alpha from beta, or what a cross-tested plan is, this could be your answer. The 40-page glossary of common and obscure DC definitions was created 10 years ago and has been updated annually since then. I believe it to be the most comprehensive glossary of DC terms available.

The glossary is available in either PDF (which stands for Portable Document Format) or paper copy (which, thankfully, still means what you think it means). To request a paper copy, please call the Invesco Retirement Desk at 800 370 1519.

That way, when someone asks, “what is EGTRRA?” or “who is an HCE?,” you don’t have to answer “IDK.”

Important information

Blog header image: lzf/Shutterstock.com

Jeffrey Hemker
National Sales Manager
Retirement Division

With more than 30 years of experience in the industry, Jeff Hemker has been a featured speaker at advisor meetings, training and education seminars and industry events throughout his career.

Prior to joining Invesco in 2004, he was a managing director of retirement outsourcing services for WySTAR Global Retirement Solutions and a senior vice president at both CIGNA Retirement & Investment Services and Van Kampen American Capital Funds.

Mr. Hemker graduated from the University of Wisconsin-La Crosse and Roosevelt University. He holds the 7, 63 and 66 registrations and is a Certified Investment Management AnalystSM (CIMA®) professional.

More in Retirement
FAQs about 401(k)s
Seven FAQs about 401(k)s

The Investment Company Institute (ICI) recently published a list of frequently asked questions (FAQs) about 401(k) plans.1 These FAQs reflect the importance of these plans...