The Client
A profitable professional services firm that has six owner-employees as part of 12 total employees -- annual payroll ~ $ 3,250,000.
The Summary Overview
Existing qualified retirement programs (of the "traditional" variety) were already fully utilized and providing decreasing "bang-for-the-buck" vis-à-vis tax law changes since the mid-1990's. Owners wanted substantial deductions in excess of existing programs that would provide additional "leverage" to the six owners.
The Consideration
After extensive analysis, a "Specialized Employees Benefit" Plan was designed in conjunction with our affiliated employee benefits firm which would not interfere with existing programs while avoiding "Highly Paid" and "Control Group" regulations that severely limited the further use of "traditional" retirement plans.
The Result
A new (supplemental) plan which allowed the deduction of ~$933,000+/year, provided a death benefit of 10 times compensation for all employees, utilized ~98% of annual payments to be set aside for the six owner-employees and provided the availability of substantial non-taxable cash for retirement (i.e. 50-100% in excess of paying taxes on a bonus and investing in municipals).