Why Life & Annuities Are Used in 412(e)(3) Retirement Plans

[Steve Savant]

Interestingly enough, enrolled actuaries review product offerings to comply with these plans. They're based on unisex rates and contractual guarantees. There are now two indexed annuity products that qualify for 412(e)(3) plans. Nationally recognized 412((e)(3) expert Nick Paleveda, MBA J.D., is interviewed on "Let's Get Down to Business."

Before Nick recorded this series just after he argued a significant case in front of the U.S. Supreme Court.

How life and annuity products can expand your business - 412(e)(3) Retirement Plans - YouTube

 

[Justin Bilyj]

412 plans got a ton of flack in 2008, even one site called 412 an abusive practice. Can you tell us the possible risks with these plans? Do you think these will be viable in the future as well Steve?
Appreciate the insight, these seem to be the only real way to have a life insurance contract (along with an annuity) be tax deductible for a retirement plan...

 

[Steve Savant]

"The U.S. Tax Court finally slammed illegal 412(i) plans. No mercy rule was installed in Soni v. Commissioner, and all penalties were placed on the plan [6662(a) and 6664(d)]. If you read the case, the court stressed the importance of review by a CPA or attorney." - Nick Palaveda, MBA, J.D. Quote from Nick's recent article posted two days ago.

The defined benefit plan that Nick espouses complies with section 412(e)(3). I have been recommending Nick for those pursuing this type of defined benefit plan.