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Category : Employee Benefits

Corporate Benefit Liability Funding

  • John Griffin
  • February 24, 2017

Every company has certain benefits which it provides to its key employees which create the need to find a means of funding that liability. For the most part, companies are looking for tax efficient ways to fund their benefit liabilities and a means of being able to finance those liabilities without significantly impacting the financials of the company.

Financing benefit liabilities, such as nonqualified plans and other benefit liabilities, allows companies advanced options to balance the rising costs of their benefit plans with a greater return on their investment if effectively planning for—and minimizing the impact of—benefit distribution. Shareholder and accounting management practices make it increasingly beneficial to fund plans in today’s market. With many ways to establish an informal funding mechanism for nonqualified benefit liabilities, funding options are frequently combined to provide the best outcome for the specific needs of a corporate client. SSG provides expertise and analysis to facilitate an appropriate informal funding decision. Below are a few popular informal funding concepts.

  • Corporate owned life insurance (COLI) and bank owned life insurance (BOLI) with cash value build-up are often selected to target matching plan liabilities. COLI and BOLI buyers benefit from annual reviews that evaluate their life insurance policies for appropriate strategy, structure, pricing and competitiveness. Many times this doesn’t happen and corporate buyers are hard pressed to find an expert committed to ongoing policy review. SSG provides COLI audits to analyze carrier strength, pricing efficiency, and expenses, as well as compare investment management and alternatives. The corporate buyer will receive a full analysis of their current product(s) and strategy effectiveness, along with recommendations and alternatives.

What is oftentimes discovered is that corporately owned life insurance (COLI) can and does provide an economical alternative to funding those liabilities in some other manner.

  • Annuities often complement an investment plan by providing a stream of steady income for an employer or executive. Investments in an annuity can be made in lump sums or over a period of time, and payments can start immediately or at a later date. Offering a range of options, annuities can also be used for tax-free income, customized, continual payments for the length of the claimant’s life, payments to a named beneficiary, or as settlements for corporate plans.
  • Other informal funding options may include mutual fund investments. Mutual funds create the option to fund a plan with a matching asset that will grow over time to offset the payment obligation.

The availability of so many options for financing benefit liabilities enables companies to offer more competitive benefit plans while efficiently planning for distribution. SSG has the expertise to evaluate those options for you and to provide you with the means of making an informed choice.

employee benefits issues and solutions impact employer profitability

Employee Benefits Issues and Solutions

  • John Griffin
  • October 24, 2016

How to align the security needs of employees with the profitability needs of employers.

Both, employee benefits issues and solutions are there by design, as employee benefits can and should be a valuable alignment tool, but most employers administer them as a necessary evil. The programs can range from group life insurance to group health insurance and even encompass diverse voluntary benefits geared to your employee demographics.

SSG Companies Pay or Play Employee Benefits Advice

Pay or Play Requirements

  • John Griffin
  • June 17, 2014

Even though the effective date for the application of the penalties for employers has been changed for large employers, the shared responsibility rules continue to be intact with various dates which will become effective based upon the number of employees of each company.

Newly issued final rules provide guidance for large employers who are subject to the shared responsibility (“pay or play”) requirements under Health Care Reform. These employers may be liable for a penalty if they do not offer affordable health insurance that provides a minimum level of coverage to full-time employees (and their dependents), and any full-time employee receives a premium tax credit for purchasing individual coverage on the Health Insurance Marketplace (Exchange).