Section 105 Benefits Plan

[Ann H]

I'm talking about the 105 plan that The Total Financial Group came up with where the employee contributes to a reimbursement account and then are given a weekly loan which is secured with a credit life insurance policy. Most employees end up bringing home more money and employers save a bundle on FICA taxes.

Hmmm..... what sounds wrong with this scenario? employee contributes to a reimbursement acount, given a loan, secured with credit life insurance, employees bring home more money, employers save a bundle on FICA taxes... Could that Total Financial Group be the same one referenced in the article at Insurance News - Church caught up in nightmare after life insurance scheme sours [Indianapolis Business Journal (IN)]

Lindberg Road Church of Christ in Anderson didn't have many financing options when its leaders decided in 2005 that it was time to expand a successful child care center.

The church could use $700,000 in pledges from its members to obtain a construction loan and work in phases. Or it could take out life insurance on some of its elderly members and use their death benefits to back a $2.5 million line of credit, which would pay for the child care center plus other upgrades at the affiliated Anderson Christian School.

Lindberg Road opted for the latter and in late 2006 bought $4.35 million in life insurance on 11 of its members. Now, the church is trying to avoid foreclosure by Fort Wayne-based Star Financial Bank, which promoted the insurance scheme along with Total Financial Group of Carmel.​

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...My question was looking for someone who has implemented this specific plan, hence you have nothing further to contribute.

Dude, you just knifed Leevena, who is one of the most knowledgeable agents on this board.

 

[smokin goose]

@ annh Could be the same people?? Very interesting article.

A friend introduced me to this plan several months ago and the way it works it just seems to good to be true. My friend is a good guy, I just didn't know if this Total Financial Group was on the up and up. I started the thread to see if anyone has dealt with them and this plan.

I was afraid people would start posting how a 105 works. That's not what I was looking for. I knew if someone had enrolled this plan they would recognize what I was talking about. Leveena didn't know what I was talking about. All due respect to her, but it wasn't the info I was looking for.

 

[leevena]

@ annh Could be the same people?? Very interesting article.

A friend introduced me to this plan several months ago and the way it works it just seems to good to be true. My friend is a good guy, I just didn't know if this Total Financial Group was on the up and up. I started the thread to see if anyone has dealt with them and this plan.

I was afraid people would start posting how a 105 works. That's not what I was looking for. I knew if someone had enrolled this plan they would recognize what I was talking about. Leveena didn't know what I was talking about. All due respect to her, but it wasn't the info I was looking for.

First off, I appreciate Ann's defense.

Second, I am not a female.

Lastly, your early posts asked about a 105 defined benefit plan. I took the time to visit the Total Financial Group and search for this product/strategy that you were asking about, but could not find anything. I again responded to which you posted that I did not know what you were talking about, which is true. You gave us no details other than "105 defined benefit" plan.

In the future you may want to state your question/needs with a little more clarity and you may want to consider the tone.

 

[smokin goose]

First off, I appreciate Ann's defense.

Second, I am not a female.

Lastly, your early posts asked about a 105 defined benefit plan. I took the time to visit the Total Financial Group and search for this product/strategy that you were asking about, but could not find anything. I again responded to which you posted that I did not know what you were talking about, which is true. You gave us no details other than "105 defined benefit" plan.

In the future you may want to state your question/needs with a little more clarity and you may want to consider the tone.

I apologize for being so harsh. I am normally in the FE forum which is a different atmosphere. I also apologize for the gender mixup.

 

[Jwalker602]

Has anyone ever heard of or enrolled the "section 105 defined benefits plan"?

Yes, I have enrolled several groups. It's called a self funded defined benefit cafeteria plan. It is a game changer. Saves the employer money, and employees receive a life insurance policy, supplemental benefits, funded by their benefit bank.

 

[Snoman]

It is not the same Total Financial Group, nor do they have the same name.

Denis Joachim began operating under the name The Total Financial Group in Metarie, LA (after securing a contract with the original plan designer) as a marketing company in 2011. That relationship became troublesome later in 2011 and finally ended in a fireball in Q2 2012. Supposedly when TTFG wanted to "enroll" clients into a new Life Company instead of keeping the status quo.

A few agents working under TTFG in 2011 walked out and secured "financial" backing to create Cypress Associates out of Houston.

Both TTFG and CA offer what has effectively become a one stop shop as Plan Administrator, Benefit Agent and provider of the employee loan. I'm no IRS agent, though my naive research showed this to be against regulation.

CA's changes in plan design are so far from the original that the original product designer left them alone. CA appears to do so under a single policy umbrella, a single document covering everything 105 medically qualified (Life, health, AD, Dental, LTC, LTD, out of pocket expenses, etc etc etc). The "loan" is being provided by an outside company supposedly, but in fact controlled and owned by the same people.

TTFG appears to have taken the original 2011 / 2012 plan documentation, swapped logos on it and continued doing business with some added meaningless paperwork. My favorite was "TTFG guarantees your IRS audit and take full responsibility". I've asked for copies of their compliant Plan Docs and Loan agreement, but neither exist that anyone can find and everything is administered by them in house; Plan, Sales & Loan.

I am horrified for the companies that have become involved with these two groups as the implementation documentation is nearly non-existent, the paperwork involving the loans are full of holes and the corporate structure / sales aspect all appear to be non-compliant once you are fully versed in their docs compared to the DOL and IRS regs.

Unfortunately however, when your commissions top $500 - $1,000 per employee you enroll...it's funny how much you stop investigating your own product. A wolf is still a wolf, no matter how much sheep clothing you put on it.

-Sno

 

[GBurns]

How fast can you run?

The IRS has explained many times that medical expense money cannot be "advanced" "loaned" or "borrowed". They have been doing this even before Revenue Ruling 2002-80. Promoters have even received jail time, yet this scheme keeps coming up.

I have run into both a few times and each time the agent has done no due diligence or research and has no idea how the scheme works. The agents have heard about the approval letter from the law firms but have never seen it and have no idea hat is said in them. One agent said that he thinks it is okay because they told him that the company has been in business or 20 years another said that the letter from the law firm said that the scheme was solvent so it must be okay.

It seems that suckers are easy to find, if you look for insurance agents.

 

[Googly Moogly]

Hmmm..... what sounds wrong with this scenario? employee contributes to a reimbursement acount, given a loan, secured with credit life insurance, employees bring home more money, employers save a bundle on FICA taxes... Could that Total Financial Group be the same one referenced in the article at Insurance News - Church caught up in nightmare after life insurance scheme sours [Indianapolis Business Journal (IN)]

Lindberg Road Church of Christ in Anderson didn't have many financing options when its leaders decided in 2005 that it was time to expand a successful child care center.

The church could use $700,000 in pledges from its members to obtain a construction loan and work in phases. Or it could take out life insurance on some of its elderly members and use their death benefits to back a $2.5 million line of credit, which would pay for the child care center plus other upgrades at the affiliated Anderson Christian School.

Lindberg Road opted for the latter and in late 2006 bought $4.35 million in life insurance on 11 of its members. Now, the church is trying to avoid foreclosure by Fort Wayne-based Star Financial Bank, which promoted the insurance scheme along with Total Financial Group of Carmel.
​

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Dude, you just knifed Leevena, who is one of the most knowledgeable agents on this board.

TFG is located in LA and Texas...not Indiana. I was approached about doing this plan a few years ago. Went another direction.

 

[ABC]

There is ethical approaches to business and non ethical approaches.

You lawyers always seem to be on the ethical side, Right?

How fast can you run?

The IRS has explained many times that medical expense money cannot be "advanced" "loaned" or "borrowed". They have been doing this even before Revenue Ruling 2002-80. Promoters have even received jail time, yet this scheme keeps coming up.

I have run into both a few times and each time the agent has done no due diligence or research and has no idea how the scheme works. The agents have heard about the approval letter from the law firms but have never seen it and have no idea hat is said in them. One agent said that he thinks it is okay because they told him that the company has been in business or 20 years another said that the letter from the law firm said that the scheme was solvent so it must be okay.

It seems that suckers are easy to find, if you look for insurance agents.

 

[Snoman]

...and on August 23rd, 2013...the house of cards comes crumbling down.

Permanent injunction issued from doing business without specific review of the court ordered by 22nd Judicial District Judge, Peter J. Garcia, Parish of St. Tammany, Louisiana.

NO. 2013-14799

Rats will still try and swim.

-Sno