See dependent care assistance plan.
Death benefits
The payments that may be provided under a qualified pension plan that are to be made to a beneficiary of a deceased plan participant. Such payments must be incidental to the retirement benefits provided under the plan.
Factors such as death, disability, or termination that determine the probability of a plan participant’s leaving the pension plan prior to retirement.
The amount of covered charges incurred by the protected individual that must be assumed or paid by the insured individual before benefits by the insurance company become payable. A deductible is most commonly used in major medical policies; however, it may also be incorporated in base plan policies.
Deferred annuity
An annuity providing for the income payment to begin at some future date.
Deferred compensation
Pay that employees are not eligible to receive when they earn it or that they give up the right to receive immediately; any form of compensation designated for payment at some point in the future, usually for tax-reduction purposes.
Deferred compensation plan
A plan that allows employees to accrue compensation without recognizing it as current income for tax purposes.
Deferred group annuity contract
One contract purchased by a plan sponsor to cover the entire group of participants in a pension plan. Calculations are normally made for each participant, and the benefits accrued each year for each participant are purchased from an insurance company for a single premium.
Deferred retirement
Postponed until after the normal retirement age specified in a plan. The opposite of early retirement.
Deferred vesting
A form of vesting whereby plan participants acquire rights to vested benefits upon the fulfillment of certain requirements (e.g., an attained age or years of service).
Defined benefit pension plan
A pension plan that specifies the benefits or the methods of determining the benefits but not the level or rate of contribution. Contributions are determined actuarially on the basis of the benefits expected to become payable.
Defined contribution pension plan
An individual account pension plan in which the contributions are specified and the benefits are determined by the amount accumulated in the participant’s account.
De minimis fringe benefits
Small services or goods given as employee benefits that have a value so minimal that it would be impractical or unreasonable for the employer to account for it. De minimis benefits are usually excluded from taxable income.
Dental service corporation
A nonprofit organization that underwrites or administers contracts for dental care.
Dependent care assistance plan
A plan under Section 129 of the Internal Revenue Code that permits employers to provide up to $5,000 in dependent care assistance to employees without generating taxable income.
Dependent care expense reimbursement plan
A flexible spending account that allows employees to allocate money for dependent care expenses on a pretax basis.
Determination letter
A letter issued by the office of a district director of the Internal Revenue Service stating its determination whether a plan that has been submitted meets the requirements for qualification under the applicable sections of the Internal Revenue Code.
Diagnostic-related groups (DRGs)
A system currently used by Medicare that reimburses fixed amounts to health care providers for all care given in connection with standard diagnostic categories.
Physical or mental handicap resulting from sickness or injury. Disability may be partial or total.
Disability income insurance
A form of health insurance that provides periodic payments to replace income when an insured person is unable to work as a result of illness, injury, or disease.
Disability pension
An annuity payable under a pension plan when a participant becomes disabled prior to normal retirement date.
Disability retirement
Termination of employment generally resulting in a disability pension (retirement allowance) because of physical incapacity as a consequence of illness or injury that occurs prior to the date a participant becomes eligible for normal retirement.
Disability retirement benefit
A benefit, usually in the form of monthly payments, paid by a retirement plan to a participant who stops working because of permanent total disability.
Disbursed self-funded plan
A plan that pays employee claims directly from the company’s cash flow, making the payments deductible on a cash rather than an accrual basis. Because they have no reserves, such plans usually obtain stop-loss insurance.
Discount rate
The assumed interest rate (settlement rate) at which the pension obligation could be effectively settled (eliminated).
Discount stock option
Rights to a stock option at a price below fair market value.
Discounted restricted-stock purchase
An employee’s purchase of restricted stock from the employer at a price below the current market price.
Discretionary formula plan
A profit-sharing plan providing that the employer’s contribution is to be determined at the employer’s discretion. This provision enables the employer to determine or to change annually the amount or the formula for its plan contribution. For the plan to maintain its qualified status, however, employer contributions must be recurring and substantial.
The instance when a particular plan, through either its provisions or its operation, favors company officers, company stockholders, or highly compensated employees to the detriment of other employees of the company.
The loss of favorable tax treatment under the Internal Revenue Code. This loss results from operating the pension plan in a manner contrary to provisions of the plan document or from failure to meet the requirements of ERISA and the Department of the Treasury.
Payment of money from deferred compensation plan assets.
Limiting investment risk by investing in a variety of types of assets. Sound investment practice normally calls for diversification of assets.
A return of part of the premium on participating insurance to reflect the difference between the premium charged, on the one hand, and the combination of actual mortality expense and investment experience, on the other. Such premiums are calculated to provide some margin over the anticipated cost of the insurance protection.
Dividend addition
An amount of paid-up insurance purchased with a policy dividend and added to the face amount of the policy.
Dividend equivalents
An amount of money equal to dividends per share paid to key employees in some incentive plans.
Defense of Marriage Act
See also: Benefits for Same-Sex Couples; U.S. v. Windsor, 133 S. Ct. 2675 (2013)
Double indemnity
An insurance policy provision usually associated with death that doubles the payment of a designated benefit when certain kinds of accidents occur.
See diagnostic-related groups.
Duplication of benefits
Overlapping or identical coverage of the same insured individual under two or more health plans, usually the result of contracts of different insurance companies, service organizations, or prepayment plans; also known as multiple coverage. 

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