Under guidelines in Section 419A(f)(6) of the Internal Revenue Code, a business can provide a welfare benefit plan that offers fixed life and death benefits to employees and deduct its plan contributions as a tax-deductible expense.

Tax & Financial Strategies, LTD will guide your business in adopting a 419A(f)(6) Plan. This type of plan may not be used by sole proprietorships.

A 419A(f)(6) Plan is not a qualified retirement plan, and contributions to the plan are not affected by contributions to qualified plans.

BENEFITS OF THE PLAN A 419A(f)(6) Plan can be an effective tool to provide welfare benefits to one or more employees and tax benefits to employers.

Benefits for the employer include:

     • Contributions fully tax deductible

     • Contributions limited to reasonable compensation

     • Ability to target key employees

     • Not a Qualified Retirement Plan

     • Effective employee retention tool

     • Plan assets insulated from creditor claims

Benefits that may be offered to the employee under the plan include:

     • Medical insurance

     • Disability insurance

     • Long-term care insurance

     • Severance benefits

     • Death benefit

PLAN FEATURES A 419A(f)(6) plan is a multiple employer trust that controls all plan assets for the benefit of the participants. Because the trust owns all assets, the contributions to the plan are protected from the creditors of a contributing business.

An employer may withdraw from the plan without affecting employee participation provided that all employee benefit contributions are paid in full.

ESTABLISHING A 419A(f)(6) PLAN FOR YOUR BUSINESS A 419A(f)(6) plan can provide immediate and long-term benefits for employers and employees. TFS™ will work with you to develop a plan that accomplishes your objectives and meets the legal requirements of section 419A(f)(6).