Copyright © 2019 TRC Financial. All rights reserved.

TRC Financial Insurance Services and affiliates are presently licensed to sell insurance and annuity products, as well as other securities products in the following states: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Washington, West Virginia and Wisconsin. Residents of other states should consult with a local registered representative for insurance services and securities products. Proper state registration is mandatory prior to conducting business in that state. This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and a client suitability review. CA License - #0E14614 \ CA License #0B40789 \ CA License #0B52893 - The principle place of business and the state of domicile for TRC Financial is: 1 Post, Suite 150, Irvine, CA 92618. Securities offered through Registered Representatives of M Holdings Securities, Inc., a Registered Broker/Dealer Member FINRA / SIPC. Check the background of this Firm and/or investment professional on FINRA's BrokerCheck. TRC Financial is independently owned and operated and is a Member Firm of M Financial Group. Please go to www.mfin.com and click on “Disclosure Statement” at the bottom of the home page for further details regarding this relationship.

(949) 509-2940

Please reload

Recent Posts

TRC Financial Underwrites & Places $80,000,000 in Coverage for CEO

November 8, 2019

1/9
Please reload

Featured Posts

Maximizing Benefits in the Small Business Market: Executive Benefit Plan Review

January 4, 2017

 

Executive benefit plans serve as an effective tool to recruit, retain, and reward key employees.1 Regular reviews of existing plans—performed by an experienced professional—can determine whether the plan is operating as expected and meeting the objectives of the employer. In a high-tax environment, every dollar counts, and plan reviews can help to ensure employers are maximizing the benefits of their existing plans.

 

Many factors impact the ongoing effectiveness of an executive benefit plan. Because circumstances and the needs of the employer and key employees change over time, a review of the plan benefits, participants, structure, and incentives will help ensure the plan continues to meet its objectives. Some of the most important components of an executive benefit plan review include:

Executive Benefit Plan Review

 

Overall Plan Review      

 

The plan can serve as a mechanism to recruit, retain, and reward key                                                  employees, alleviate shortfalls due to restrictions on qualified plans, and                                            defer income tax payment. A review of the plan can ensure it is                                                            addressing these objectives and including all key employees.

 

Plan Assets vs. Plan Liabilities      

 

It is important to review how the business will pay the benefits                                                              of the plan at the time of a qualifying event. Are there sufficient                                                            assets to meet future, promised liabilities?

 

Performance of Plan Funding Vehicles

 

The performance of life insurance and other funding mechanisms may change over time (relative to initial assumptions) both positively and negatively. This may impact the adequacy of the plan funding and require additional contributions or other corrective action.

 

Efficiency of Plan Funding Vehicles

 

The plan funding vehicle can provide benefits in addition to funding the liability, including cost recovery and key person coverage. An evaluation of the choice of funding vehicle can lead to significant overall plan improvements.

 

Third Party Administrator (TPA)

 

The administration of the plan is as important as the plan itself. TPA reporting should be timely, accurate, and complete to avoid adverse consequences to the employer and plan participants. In addition, the TPA should have qualified and experienced staff, as well as technology designed to maximize efficiency (i.e., online access to plan information and reports, automatic rebalancing, etc.).

An experienced team of advisors—including life insurance advisors, attorneys, accountants, and financial advisors—is integral to a successful review and the overall success of an executive benefit plan.

 

Conducting the Executive Benefit Plan Review

 

The right questions must be asked and addressed to ensure the objectives of the plan are being met. Considerations when conducting the executive benefit plan review include:

  • Is the funding vehicle appropriate and does it maximize efficiency for the plan design?

  • Do current funding provisions continue to meet the business owner objectives?

  • Are the correct key employees identified and properly enrolled?

  • Are there additional key employees who should be included in the plan?

  • Are there policies or accounts in place for key employees no longer with the company who have no vested interest?

  • Do participants understand plan benefits?

  • Are beneficiary designations on file and accurate?

 

Summary

 

Working with experienced professionals to facilitate an executive benefit plan review can be helpful in assessing whether the objectives and expectations of the employer and key employees are being met. Whatever the outcome of the findings, existing plan(s) can be tailored to meet current and future needs.

 

______________________________

1 Key employee as defined according to Internal Revenue Code, section 101(j).

Please reload

Please reload

Archive