Business Owners
A 412(e)(3) plan enjoys certain advantages over the traditional defined benefit plan and is worth exploring if you are the owner of a small business.
What Requirements Must Be Met To Qualify As A 412(e)(3) Insurance Contract Plan?
The major requirements under section 412(e)(3) of the Internal Revenue Code are:
- The plan must be funded exclusively with annuity products, or a combination of life insurance and annuity products, issued by an insurance company.
- The benefits provided each individual must be equal to the values provided in the contracts and guaranteed by the insurance carrier.
- Life insurance dividends and excess annuity interest must be used to reduce the following year’s plan contribution.
- No policy loans are allowed under the contracts.
How Much Can The Initial Deductible Contribution To A 412(e)(3) Defined Benefit Plan Be?
Below is an illustration of the maximum first year contribution created by using a highly rated insurance company’s products at selected ages.
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If your goal is a large deduction for your business and a secure retirement benefit for yourself, the special characteristics of the 412(e)(3) defined benefit plan are worth exploring. We would be happy to provide you with a free look at a 412(e)(3) plan for your specific business.
A defined benefit pension plan is a significant commitment, which is why you should consult with an Chartered Financial Consultant.
For a FREE initial consultation, call today: (800) 680-5596 or click here.