Informally funding a DCP without Triggering Distribution Requirements
In order for Real Estate Investment Trusts (“REITS”) to maintain their designated tax treatment status, they must meet the annual REIT testing requirements. REITS are required to distribute at least 90% of taxable income in the form of dividend payments to their shareholders. Income realized through the growth of mutual funds – even to pay an employee benefit – must be included in the taxable income calculation, causing significant shortfalls when plan balances rise.
According to statutory filings, North American insurance companies own more than thirty-billion dollars of institutional life insurance. This Article explores the basic attributes of ICOLI, the applicable tax and regulatory structure, the available investments, the process to acquire ICOLI and how insurance companies deploy this strategy to outpace yield earned on traditional investments.
This article explores how a company can use a deferred compensation plan (“DCP”) as a tool to overcome the executive recruitment and retention challenges produced by “The Great Resignation”.
No, DCPs restore lost savings opportunities and fit in an egalitarian culture.
Many companies say yes. Here are the reasons why:
Issue: Highly compensated employees (HCEs) are in fact discriminated against by 401(k) contribution limits and testing. In 2022, an HCE is defined by the IRS as having total compensation of $135k or more (IRC Section 415).
Last year, group life insurance companies experienced a record number of death claims. Two recent reports include:
MetLife’s adjusted quarterly earnings in the U.S. group-benefits unit plummeted 95% to $20 million, from $383 million the year-earlier with increased deaths of younger people (i.e., those under age 65) with employer-sponsored benefits. MetLife paid out $1.06 for each $1 of group-life-insurance premium collected.
For most companies, preparing a request for proposals for third-party administrators (TPAs) of nonqualiNed retirement plans is a relatively infrequent occurrence, compared with doing so when seeking TPAs for other types of beneNt plans. For that reason, companies may not follow some best practices for creating such RFPs.
Fed Signals Rates Will Stay Low – Purchases Accelerate in Q4 Into the twelfth year of historically low interest rates, and with the Federal Reserve announcing rates will not move until 2023, several headwinds continue to put a damper on bank earnings.
On July 21st, Prudential Financial announced the sale of its retirement segment to Empower, a large player in the qualified retirement plan marketplace, for $3.55 Billion.
Disability insurance tends to be one of the most overlooked benefit programs in corporate America today. However, an employee experiencing a disability event is a real threat to employers, as 25% of employees entering the workforce…
FINSECA Takes a Deep Dive into the Green Book On Friday, May 28th the Biden Administration released the 6 trillion-dollar budget for the upcoming fiscal year.