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Meaning / Definition of

Flexible Spending Account

Categories: Retirement and Pension, Personnel Management,

Some employers offer flexible spending accounts (FSA), sometimes called cafeteria plans, as part of their employee benefits package. You contribute a percentage of your pretax salary, up to the limit your plan allows, which you can use to pay for qualifying expenses. Qualifying expenses include medical costs that aren't covered by your health insurance, childcare, care for your elderly or disabled dependents, and life insurance.The amount you put into the plan is not reported to the IRS as income, which means your taxable income is reduced. However, you have to estimate correctly the amount you'll spend during the year when you arrange to have amounts deducted from your paycheck. Once you decide on the amount you are going to contribute to an FSA for a year, you cannot change it unless you have a qualifying event, such as marriage or divorce.If you don't spend all that you had withheld within the year - or in some plans within the year plus a two-and-one-half month extension - you forfeit any amount that's left in your account.In some plans you pay for the qualifying expenses and are reimbursed when you file a claim. In other plans, you use a debit card linked to your account to pay expenses directly from the account.

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Definition / Meaning of

Continuous Net Settlement

Categories: Stocks,

In continuous net settlement, most securities transactions are finalized, or cleared and settled, within a brokerage firm. The firm's clients' orders to buy and sell are offset, or matched against each other, so that at the end of the trading day only those positions that haven't been offset internally remain to be settled. In a simplified example, all the shares of Stock A that a firm's clients bought are netted against all of the shares that its clients sold by reallocating ownership on the firm's books. Payment is handled in a similar fashion, as money is transferred from the buyers' account to the sellers'. If the firm has more buys than sells or the other way around, as is likely, it either delivers shares or receives them and makes a payment or receives it.Clearing and settlement for transactions that aren't offset are handled by an automated system through two branches of the Depository Trust & clearing corporation (DTCC), the national securities clearing corporation (NSCC), and the depository trust company (DTC).

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