When it comes to creating customized incentive/retention arrangements, some companies have their hands tied behind their backs. Companies without available stock options or other types of equity are at a disadvantage when it comes to high quality talent. Obviously salary and bonuses can help recruit and retain, but are often considered only the first line of attack. Some options provide incentive/retention positives, but are taxable to the executive, and also involves dependency on market performance for the executive.
Then there is Collateral Assignment Split-Dollar Plans. (CASD)
These plans consist of key personnel who receive ownership of a life insurance policy, where the employer pays premiums, but are repaid to as interest-bearing loans, and until repaid such loans are collateralized by the insurance policy.
CASD plans accomplish the goal of providing incentive and retention opportunities, enables the employer to cover the cost of the life insurance plan, and when properly structured, are tax-free to the executive and also avoid the 21% employer excise tax. If you are thinking about incorporating a CASD plan, here’s a few things to think about..
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Choose the Right Team
When making decisions of this caliber it’s obviously important to find the right team or partner to trust with running all the numbers and putting things in the right places. MBK and Associates Inc is not married to one vendor or brand, unlike many providers. We have years in the industry and understand what products work best for who, and your satisfaction is our ultimate goal. We will never push you into a plan you aren’t comfortable with, and we take the time to help you understand each step of the way.
Choose the Right Policy
Once again, we can’t state enough how as great as these plans can sound in a blog, it’s so important to choose someone you can trust to go about selecting the right policy and products. We will sit down with you and walk you through the process, help you learn about what you need to, and provide all the details to you so that it is crystal clear. There are significant differences within policies that you need an expert to really flesh out the details.
Choose Compliance
As the saying goes… “Mo Money, Mo Problems.” Dealing with these types of executive benefits plans can be confusing and frustrating, we understand that. When winding through the road of CASD and other life insurance benefits packages, it’s easy to feel as though you’re in over your head. That’s why we are here. Trust that our attack is fully in compliance and we understand the differences state to state, and we are aware of the potential rise in taxes that could be upcoming. These CASD plans are fully tax efficient, and we will help you better understand why.
You can learn more by checking out all of our content here on the website, as well as the MBK Beat Podcast where we break down various products and strategies! Listen on Apple, Spotify and view on YouTube! Want to hear more about what we do? Check out the Testimonials Page for More! You can always reach out via the contact form or give us a call to talk to Mark today!