Voluntary Deferral Plan
Vehicle for the deferring of unneeded current income for a later date, such as retirement, providing the following benefits: There is no tax on earnings of the plan until distributed; Employee is able to defer compensation in excess of the amount subject to the limitations of qualified plans since the voluntary plan is a non qualified plan; The amount the employee defers can be matched by the employer; The employer and employee have flexibility in designing BENEFITS and VESTING requirements; The employer can select employees to participate in the plan since it is a non qualified plan and does not have to comply with the antidiscrimination provisions of qualified plans found under the EMPLOYMENT RETIREMENT INCOME SECURITY ACT (ERISA); Life insurance can be used as the funding instrument and, as such,the employer can receive the death benefit, thereby recovering its matching contribution to the plan.
Popular Insurance Terms
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Mortality table used to calculate the legal reserve and life insurance policy cash surrender values. ...
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Financial instrument such as a fixed dollar annuity or bond that pays a minimum periodic income at a minimum guaranteed rate of interest. ...
Legal document that permits the individual to declare his or her desires concerning the use of life-sustaining treatment to be made at the point in time when death is imminent and the ...
Retirement arrangement in which contributions are divided between allocated (insured) and unallocated funding instruments (an uninsured plan). It seeks to combine the advantages of ...
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