Transcript Executive Bonus Plans - Voya for Professionals

Executive Bonus Plans
Reward with simplicity
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Important disclosures
• The Voya™ Life Companies and their agents and representatives do not give tax or
legal advice. This information is general in nature and not comprehensive, the applicable
laws change frequently and the strategies suggested may not be suitable for everyone.
You should seek advice from your tax and legal advisors regarding your individual situation.
• These materials are not intended to and cannot be used to avoid tax penalties, and were
prepared to support the promotion or marketing of the matter addressed in this document.
The taxpayer should seek advice from an independent tax advisor.
• Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN),
ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver
Insurance Company (Denver, CO). Within the state of New York, only ReliaStar Life
Insurance Company of New York is admitted and its products issued. All are members
of the Voya™ family of companies.
• All guarantees are based on the financial strength and claims paying ability of the issuing
insurance company who is solely responsible for all obligations under its policies.
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Introducing the Executive Bonus Plan
• Simple Plan Design
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Introducing the Executive Bonus Plan
• Simple Plan Design
• Deduction for Employer
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Introducing the Executive Bonus Plan
• Simple Plan Design
• Deduction for Employer
• May avoid § 409A Rules
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Introducing the Executive Bonus Plan
• Simple Plan Design
• Deduction for Employer
• May avoid § 409A Rules
• Flexibility to Change
Timing of Distributions*
*Loans and withdrawals may generate an income tax liability, reduce available
cash value and reduce the death benefit or cause the policy to lapse.
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Introducing the Executive Bonus Plan
• Simple Plan Design
• Deduction for Employer
• May avoid § 409A Rules
• Flexibility to Change
Timing of Distributions*
• Not Subject to ERISA
*Loans and withdrawals may generate an income tax liability, reduce available
cash value and reduce the death benefit or cause the policy to lapse.
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Executive Bonus Plan
• Employer makes premium payments on cash value life
insurance policy owned by executive
• Premium Payments treated as taxable income to
Executive
• Executive may use policy cash values to supplement
retirement income¹
• Policy provides Executive a death benefit²
¹ The policy’s cash values are available to the executive as a source of supplemental retirement income through loans and
withdrawals. Loans and withdrawals may generate an income tax liability, reduce available cash value, reduce death benefit or
cause the policy to lapse.
² Proceeds from an insurance policy are generally income tax free.
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Executive Bonus Plan: How it works
Employer
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
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Executive
Executive Bonus Plan: How it works
Employer
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Executive
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Voya Life
Companies
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Executive Bonus Plan: How it works
Employer
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Executive
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Voya Life
Companies
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Executive Bonus Plan: How it works
Employer
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Executive
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Voya Life
Companies
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Executive Bonus Plan
Potential advantages
Potential disadvantages
• Not subject to ERISA
• May not be subject to
409A rules
• Cash values may provide
additional funds for retirement
• Flexibility on timing of cash
value distributions
• Death benefit generally not
taxable as income
• Policy not subject to claims by
the employer’s creditors
• Immediate taxation to executive
• No “golden handcuffs”
• No cost recovery available to
employer
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417
Thank You!
©2014 Voya Services Company. All rights reserved. CN0318-16260-0417