You spent years building a successful business from the ground up. We know what it takes to build a business from the ground up. You’re looking for ways to recruit, reward, and retain your key people, while building your own financial independence at the same time. After all, your retirement should reflect the level of success you’ve achieved. But due to your above average income, you face contribution limits on qualified plans that could lead to a significant future income gap. Our Executive Life Income Plan may be the answer.
Our Executive Plans are a comprehensive solution for business owners seeking to retain key employees through a future benefit, while enhancing opportunities for tax-advantaged cash values to meet their own accumulation goals. The Executive Life Income Plan for Business was designed to provide investment options to business owners and their key employees that help meet their accumulation goals.
Section 162 Plan

Often called “executive bonus plans,” section 162 plans are a simple way to reward top executives. Under this type of plan, an executive purchases a permanent life insurance policy on his or her life. The employer bonuses the employee the premium, which is usually taxable income to the employee and tax-deductible to the employer. The employee controls the policy, including the death benefit and the cash value, which accumulates tax-free until it is withdrawn. In some cases, a “restrictive endorsement” is used, which limits the employee’s access to the policy cash value until a qualifying event occurs, such as the attainment of a certain age or years of service, a disability, or normal retirement. This serves as a type of “golden handcuffs,” allowing employers a way to retain top employees.

Deferred Compensation Plan
In a deferred compensation plan, an executive defers a portion of his or her present compensation until retirement. These plans may discriminate as to which employees are eligible to participate, and are often limited to only a small group of top executives. Under a properly designed plan, no income taxes are incurred by the participant until the money is received. However, an employer may not deduct any amounts paid to plan participants until funds are actually distributed. Often, life insurance policies are used as an informal vehicle for holding and growing the deferred funds.

Supplemental Executive Retirement Plan

In a Supplemental Executive Retirement Plan (SERP), the employer provides funding for a defined benefit or defined contribution plan for a select group of employees. A SERP provides for a series of payments to be made to the executive at retirement. The plans also often promise to pay the executive’s spouse a benefit if the executive dies prior to retiring. SERP benefits are often informally funded by life insurance.

Split Dollar Life Insurance

Split dollar life insurance involves the purchase of life insurance where the ownership of the policy cash value and death benefit is divided. The executive owns a portion of each, and the employer, which typically pays all or most of the premium, owns the remainder. This type of insurance plan is often used when a company wishes to provide lifetime protection for an employee while retaining the ability to obtain cost recovery for its policy contributions.

Supplemental Executive Retirement Plan

In a Supplemental Executive Retirement Plan (SERP), the employer provides funding for a defined benefit or defined contribution plan for a select group of employees. A SERP provides for a series of payments to be made to the executive at retirement. The plans also often promise to pay the executive’s spouse a benefit if the executive dies prior to retiring. SERP benefits are often informally funded by life insurance.

Key Components of the Plan
  • A tax-deferred life insurance policy designed to mitigate the potential income gap left by traditional benefit plans, helping business owners like you retire on a significant percentage of your final income while providing valuable protection for your loved ones, and

  • A Supplemental Employee Retirement Plan option (SERP) for select key employees, giving them a vested interest in the business for future benefit with possible access to liquidity should an equity opportunity arise.

  • A one-way Buy-Sell agreement between you and your key employees which can be funded from the acceleration of benefits from the Key Employee’s SERP Plan.

  • Accumulation-Focused Design

  • High Early Cash Surrender Values and Access1

  • Tax-Advantaged Access & Distribution

  • Death Benefit Protection

  • No Direct Surrender Charges

  • Creditor Protected (in many states)

Our nonretail strategies help high income executives, professionals, and small business owners plan for and implement an income replacement strategy that seeks to provide financial independence in retirement. Utilizing cash-value corporate-owned life insurance, our plans can help you meet your accumulation goals in order to retire on a significant percentage of your final income, while providing valuable life insurance protection at the same time.

Deferral Plans

Contribution limits on traditional benefit plans can keep your key executives and employees from meeting their retirement accumulation goals, making it hard to stay with your company long-term. To ensure the future success of your company, securing a solution to this problem should be your number one priority. A Nonqualified Deferred Compensation Strategy from CMG D.C. may be the answer.

Plan design features allow key employees the ability to:

  • Restore lost pre-tax deferrals of salary and bonus amounts,

  • Potentially receive a company match or discretionary contribution,

  • Select future distribution options, and

  • Allocate deferrals into multiple investment options.

Our Non-qualified Deferred Compensation Strategies enable you to establish future plan benefits that align the financial goals of your executives with the company’s goals, helping you both achieve your growth objectives.

SERP Plans

Our Supplemental Key Employee Retention Plan (SERP) designs feature informal funding alternatives and comprehensive plan administration for the small and mid-corporate markets, allowing you to offer a future benefit to your key employees while remaining in complete control of all aspects of the plan.

Key Aspects of a Non-Qualified SERP
  • Fully discriminatory with custom benefits as a group or to an individual level

  • Corporate liabilities are not a balance sheet issue until vesting occurs

  • Decisions for awards are made annually based on established performance criteria

  • Assets, if established, are highly liquid and accessible at any time by the company

  • Pre- and post retirement benefits designs are available

  • Corporate Owned Life Insurance (COLI) is available and accessible to smaller companies

  • Complete plan and asset administration completes the Turn Key Platform

We’re able to do this by defining & choosing the type of future benefits you wish to offer under pre-determined criteria, establishing who will be eligible and what they will be eligible to receive at a future date. As those individuals meet profit objectives, a company liability will build, which can offset by building a corporate owned and controlled asset.