Planning for Business Succession
When business owners are asked to consider their business succession plan, they often mistakenly think this means taking steps to secure the future of their business should they die or become disabled unexpectedly. While this is important, it is more likely someone will leave their business voluntarily through a transfer to family members, key employees […]
Attract, Reward and Retain Key Talent with Restricted Executive Bonus Arrangements
Over the past twenty years, numerous tax law changes have reduced personal income tax rates to the lowest marginal rates in over fifty years. At the same time, additional restrictions and reporting requirements have been imposed on tax-qualified retirement plans, making them increasingly unattractive for key employees. These changes have led to the widespread implementation […]
Nonqualified Defined Benefit and Defined Contribution Plans
Due to the restrictions on qualified plans, especially for higher compensated executives, employers are increasingly turning to nonqualified plans to recruit, retain, reward and retire key employees. These plans fall under the descriptions and rules provided in Internal Revenue Code §409A and include popular plan types such as traditional, nonqualified deferred compensation (NQCD) and Supplemental […]
Life Insurance is the Misunderstood Underdog
Roth IRAs are attractive savings vehicles. After tax money placed into a Roth IRA grows tax-free and then can be taken out tax-free. It would be a tremendous benefit for a Roth IRA owner to put as much money as possible into the product. Unfortunately, this is not possible because a Roth IRA is considered […]
Split Dollar Planning
Over the past decade, numerous tax law changes have reduced personal income tax rates to the lowest marginal rates in over fifty years. At the same time, additional restrictions and reporting requirements have been imposed on tax-qualified retirement plans, making them increasingly unattractive for key employees. These changes have led to the widespread implementation of […]
The Advantages of Nonqualified Plans
Integrating a nonqualified plan with a current 401(k) plan can assist an employer in resolving potential compliance testing issues and prevent testing failures, while allowing highly compensated employees (“HCEs”) to maximize their retirement savings. Adding a nonqualified plan also helps companies maintain a competitive benefit package that can recruit, reward, retain and retire key talent. […]
Addressing 401(k) Limitations for Highly Compensated Employees
401(k) plans have become the standard for companies to help their employees save for retirement; however, the rules for participating present challenges for employers and their executives who usually meet the definition of a highly compensated employee (“HCE”). The contribution limits apply to all employees, including HCEs, and permit a participant to contribute up to […]