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The greatest strengths of LBPTM include : current deductibility, tax free distribution, access to your money before retirement, the ability to elect deferrals in the year they are earned and the ability to 'change your mind' without trigging penalties now faced by traditional plans. LBPTM has so many improved variations over traditional plans, that it is truly the “Swiss Army Knife” of Executive Benefits.
In addition to providing substantial benefits compared to traditional voluntary deferral and SERP arrangements, LBPTM provides unique opportunities in the following circumstances:
• 412(i) Plans - LBPTM is the ideal back-up sale when a producer closes on a 412(i) plan and the client says "I want to discriminate." LBPTM offers the same deductibility, life insurance protection (without an annuity), and tax- free distributions without having to 'roll-out' the life policy from the plan.
• Split Dollar - LBPTM is an excellent alternative to split dollar plans, providing the corporation the ability to deduct the gross premium in the form of a bonus to the executive. Additionally, the corporation is able to deduct amounts paid to the executive equal to the interest on the loan provided by Peachtree LBPTM. Corporations prefer utilizing the financing provided by Peachtree LBPTM rather than lending corporate dollars.
• Section 162 Bonus Plans - LBPTM has become the preferred method of providing a 162 bonus plan to key executives, where the corporation does not have to provide a double bonus in order to cover the tax liability created when a bonus is paid. Peachtree LBPTM lends the executive an amount equal to the tax liability and the corporation provides a bonus to cover the interest on the loan each year.
• 401(k) Plans - LBPTM is an alternative to traditional 401(k) plans that must become a 'safe harbor plan' in order to allow a handful of executives to contribute their full amount for the current plan year. LBPTM is also an ideal non-qualified plan supplement to any qualified plan.
These innovative and unique strategies involve a unique loan offered exclusively by Peachtree LBPTM. The loan is non-recourse with no personal guarantee. The executive is automatically approved. There is NO individual financial underwriting, minimum net worth or credit-reporting requirement.
A review of LBPTM should be on the shortlist of every executive benefit advisor. For additional information please contact Louis Gardner, LBP Vice President Insurance Services. To speak with an LBPTM specialist, please call us at 1-866-LBP-5532.
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