Supplemental Retirement Plan Solutions

Recent regulatory changes and the current economic environment have made traditional deferred compensation plans far less popular than in the past. Click here to learn more about the challenges facing these programs:

Challenging Times for Traditional Supplemental Retirement Plans

BeneFacio, Inc.'s insurance-financed supplemental retirement plans have the potential to create retirement income that is comparable to, or greater than traditional deferred compensation plans. However, unlike deferred compensation plans, none of these solutions are subject to §409A, §457, or ERISA regulations.  That can translate to lower costs and simplified administration for plan sponsors, and reduced compliance-related financial risks for participants.

All of these plan designs offer some common benefits to participants.  For example, participant retirement benefits are not subject to employer creditor claims in the event of bankruptcy.  In addition, assets grow on a tax-deferred basis, and tax-free distribution options are available.  Life insurance benefits are also provided on a pre- and post-retirement basis.

Each design option also offers attractive features for plan sponsors.

LIFE INCOME STRATEGY PLAN

Life Income Strategy Plans create supplemental retirement income through a combination of after-tax participant contributions and policy-based loans.  These programs are particularly attractive to employers, since contributions are tax-deductible, there is no balance sheet liability, and there is minimal ongoing plan administration.  These plans allow employers to enhance their overall benefit packages with no incremental out-of pocket cost.

EXECUTIVE LEVERAGED BONUS PLAN

Executive Leveraged Bonus Plans create supplemental retirement income through a combination of after-tax participant contributions and loans from the employer to the participant based on the Applicable Federal Rate (AFR).  As with Life Income Strategy Plans, contributions are tax-deductible and there is no balance sheet liability.  In addition, the employer is able to book the loans as assets, and ultimately recovers all of its loan costs plus interest from policy values.

SUPPLEMENTAL INCOME AND INSURANCE PROGRAM

Supplemental Income and Insurance Programs create supplemental retirement income through the use of AFR-based loans from the employer to the participant that fund all plan contributions. These plans do not create any employer benefit expense, there is no balance sheet liability, and the employer is able to book the loans as assets.  In addition, the employer ultimately recovers all of its loan costs plus interest from policy values.