Benefit plans are often funded with company cash, taxable investments, institutionally priced life insurance contracts, or a combination thereof. Often the costs and benefits of utilizing Corporate Owned Life Insurance (COLI) or Bank Owned Life Insurance (BOLI) are misunderstood.
PensionmarkMeridien designs, implements, and administers executive benefit plans to supplement and enhance the restrictive qualified retirement and group insurance plans. We create executive benefit plans that are cost-efficient and effective in enabling you to selectively attract, retain and reward the key decision makers important to your business.
As specialized consultants, we assess your current executive compensation structure, identify opportunities to optimize benefits and create more impactful programs. Our goal is to design tailored solutions that enable your key leaders to achieve their long-term financial objectives while aligning with corporate interests.
Non-qualified plans offer a potential solution, addressing the limitations of traditional qualified plans for an organization’s key employees. Plans can be tailored to resemble familiar 401(k) features while removing the cap on contributions. They allow for the deferral of various income types, including base salary, bonuses, commissions, and special incentives.
Additionally, these plans typically offer more flexible payout options, providing executives with greater control over their retirement savings strategy.
Voluntary Deferral Plans provide a cost-effective way to support your executives in building retirement income. By providing your executives with the option to defer a greater portion of their salaries than is permitted under a qualified plan, a Voluntary Deferral Plan allows you to help your key executives save for retirement without having to make any additional employer contributions.
Supplemental Executive Retirement Plans (SERPs) solve retention and motivation problems, helping retain executives who are crucial for the continuity of your business’s success.
SERPs can be tailored with vesting schedules that require executives to remain with your organization for a specified number of years before gaining access to the funds—creating a “golden handcuffs” scenario that aligns their goals with the long-term continuity of your business.
A combination of both the Voluntary Deferral Plan and a SERP, a 401(k) Mirror Plan enables the executive to defer salary and allows the business to match the deferrals beyond the qualified plan limits without taxation to the executive until retirement or some other specified date. Golden handcuffs can be created by subjecting the business’ matches to a vesting schedule.
The business provides a taxable bonus to the executive who will use the after-tax bonus amount to make life insurance premium payments to an executive owned life insurance policy.
If you wish to provide a stronger incentive for your executive to stay, the Restrictive Executive Bonus Arrangement (REBA) goes one step further to create “golden handcuffs” to retain a key executive by filing a direction form with the policy which states the exercise of all policy ownership rights (except for beneficiary designation) requires the signature of both the executive and the business.
Provides life insurance protection for the executive at a minimal or shared cost to the executive. Nonequity Collateral Assignment Split-Dollar Plan pays the premiums for an executive-owned policy with the business’ dollars secured by the policy’s cash value and a portion of the death benefit. Trust-Owned Nonequity Collateral Assignment Split Dollar Plan pays premiums for an ILIT-owned policy with the business’ dollars secured by the policy’s cash value and a portion of the death benefit, providing potential gift and estate tax savings.
The Death Benefit Only Salary Continuation Plans provide income to the executive’s beneficiaries after the executive’s death.
Key Person Life Insurance Plans provide funds to a business to compensate for the loss of a key executive.
In today’s disability insurance market, 60% of income has been the industry standard target income replacement figure. One of the biggest shortfalls group disability programs, and even traditional disability insurance carriers have, is their limitation on the size of monthly benefits. Obtaining adequate income protection for highly compensated individuals is a challenging process, which may take two to three separate disability insurance policies to accomplish. With the average disability claim length lasting roughly three years, an individual will need to have a sizeable savings account if they are not insured at 60% income replacement.* At PensionmarkMeridien, we have decades of experience in providing solutions for high earning executives that have incomes ranging from the high hundred-of-thousands to the multimillions. Whether creating a specialized executive Group Disability contract specifically for your applicable professionals or creating a special individual disability insurance supplemental program, PensionmarkMeridien provides your employees with the benefit amounts and contract provisions to provide peace of mind.
* Source: US DOL Bureau of Labor Statistics
Your employees appreciate your providing them with a group life insurance plan. However, group life insurance plans typically have death benefit amounts and portability limitations that adversely impact your higher earners. Pensionmark Meridien assists clients in the design of group life insurance programs and executive life insurance programs; by carving out some (or all) of the executives’ coverage in the Group Life plan, potential savings may be achieved in the basic group life program, while delivering higher benefit amounts and policy provisions to satisfy the planning needs of your executive population. Further, many companies offer their employees high-value supplemental coverage in the form of permanent life Insurance. Permanent life insurance can provide benefits that are not typically available in group plans, such as true portability, ability to be owned by an irrevocable life insurance trust, level premiums, and tax-deferred cash value accumulation.
Are you looking for a way to hedge future benefit obligations? The executive benefits programs you want, or need, to attract and retain your key employees may make buying corporate owned life insurance (COLI) a smart financial strategy. PensionmarkMeridien is here to help you determine if COLI is right for your organization. Our services include customized plan design, concierge implementation support, and ongoing relationship management.
What is COLI? COLI is utilizing life insurance which your company can purchase to insure the lives of key employees.
Why consider COLI?
Our longstanding and deep relationships with top-rated COLI carriers means you get in-depth analysis of product choices, design, costs and the supporting due diligence needed for the successful implementation of a COLI program.
Banks need to provide a competitive employee benefits program while also managing costs. Offsetting expenses by informally funding employee and executive benefits with a tax-advantaged bank-owned life insurance (BOLI) asset can prove cost efficient and enhance a bank’s financial statements. Cash surrender values grow tax-deferred providing the bank with monthly bookable income. Upon the executive’s death, tax-free death benefits are paid to the bank. BOLI is a life insurance policy banks can buy to insure the lives of key employees. As the policy’s owner and beneficiary, the bank gets unique benefits, including the ability to:
Our longstanding and deep relationships with top-rated BOLI carriers means you get in-depth analysis of product choices, design, costs and the supporting due diligence needed for the successful implementation and management of a BOLI program.
Your employees appreciate your providing them with a group life insurance plan. PensionmarkMeridien assists clients in implementing group life insurance plans which have appropriate death benefit amounts and policy provisions to help your employees and their families when they need it most.
Group disability contracts are never a “one size fits all” solution. At PensionmarkMeridien, we design tailored Group Long Term Disability (LTD) insurance programs that provide your employees with benefit amounts and contract provisions designed to offer peace of mind. With decades of experience in program design, carrier negotiation, implementation, and servicing, we deliver solutions that instills confidence, whether your employees are on the floor of a retail location or in the operating room.
