Creating Unique Benefits for Business Owners and Their ... e-handout 5.17.17.pdf · 2017 MDRT...

copy 2017 Million Dollar Round Table Million Dollar Round Table 325 West Touhy Ave Park Ridge IL 60068 USA

2017 MDRT Annual Meeting e-Handout Material Title Creating Unique Benefits for Business Owners and

Their Employees Speaker Matthew E Schiff CLU ChFC Presentation Date Monday June 5 2017 Presentation Time 200 - 300 pm Session Room Hilton - Orlando Ballroom II The Million Dollar Round Tablereg (MDRT) does not guarantee the accuracy of tax and legal matters and is not liable for errors and omissions You are urged to check with tax and legal professionals in your state province or country MDRT also suggests you consult local insurance and security regulations and your companyrsquos compliance department pertaining to the use of any new sales materials with your clients The information contained in this handout is unedited errors omissions and misspellings may exist Content may be altered during the delivery of this presentation

Schiff Benefits Group May 17 2017

Integrated Executive Benefits Overview

Matthew E Schiff CLU ChFCCreating Unique Benefits for Business Owners

and Their Employees

Donrsquot get caught by surprise

For Agent Use Only

Our Story

For Agent Use Only


Integrated Executive Benefits Overview Page 2

Schiff Benefits Group LLC - Services

Help Establish Client Objectives

Design

Implementation (enrollment and underwriting)

Administrative Support

For Agent Use Only

Schiff Benefits Groupndash Professional

Expertise

Accounting

Actuarial

Administration

Compensation amp Benefits

Investment amp Insurance

Legal (outsourced)

Systems (TPAs)

Tax (outsourced)

For Agent Use Only

Schiff Benefits Group LLC

Representative Clients

For Agent Use Only



Executive Benefit Programs

For Agent Use Only

Potential Executive Benefit Programs

Executive

Supplemental Life

Insurance

Supplemental

Retirement Income

Long-Term Disability

IncomeLong-Term Care Insurance

Survivor Income Benefit

Deferred Compensation

For Agent Use Only

Target Markets

Large Industrial Corporations Banks

(Revenues gt $250 million)

Target Market =15000 Corporations Target Market = 7100 Banks

VERY COMPETITIVE MARKET VERY COMPETITIVE MARKET

Mid-Size Businesses Healthcare Institutions

(Revenues lt $350 million) (Not-For-Profit) (Minimum 5 Executives)

Target Market = 4000 Hosptials

Target Market = gt 250000+ and Medical Groups

Business Entities

VERY COMPETITIVE MARKET

LIMITED QUALITY COMPETITION

Executive Benefits Marketing Services

For Agent Use Only



Nonqualified Plan Acronyms

SERP Defined Benefit ndash Supplemental

Executive Retirement Income Program

401K Mirror Defined Contribution

Supplemental Executive Salary

Deferral Program

COLI Company-Owned Life Insurance

BOLI

GVUL

Bank-Owned Life Insurance

Group Life Insurance

Sold as Term Alternative

Good Deferred Compensation Alternative

For Agent Use Only

SERP Examplebull Obligation from the Corporation to

the employee

Corp

40 of Final Avg Salary

100

FAS

DBO

For Agent Use Only

SERPs

Yes = 84

No = 16

Companies Offering Supplemental Executive Benefits Plans

Based on TBGMullin 2014 Benefits Survey



COLI

Unique financial vehicle for generating surplus to meet company selective benefits obligations

Company is sole owner premium payer and beneficiary of COLI policies

For Agent Use Only

COLI - analogy

bull COLI is like the engine in a car ndashnecessary but not well understood

For Agent Use Only

COLI can provide

bull Employer benefits funding

wherewithal

bull Employer cost recovery

bull Participant life insurance

coverage

bull Participant life insurance policies

For Agent Use Only



SERP Example (Funded with COLI)

bull Obligation from the Corporation to

the employee paid with Company

dollars

Corp


100

FASDBO

$$$Insurance Policies

May or may

not insure

all

participants

For Agent Use Only

Examples of uses of COLI

Provide Supplement Income

Provide Supplemental Insurance

(Discriminatory)

Recover the costs of a SERP

Fund BuySell Arrangements

Recover Qualified Pension Costs

Recover Long Term Care Costs

Recover ESOP Funding Liability

For Agent Use Only

Summary Analysis - COLI

The Accounting Cost of COLI

THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only

Wants to do what the ldquoBig Dogsrdquo do

Competitors all have one

Assure future tax deduction not dividend treatment for shareholders

Secondary use of ldquoBuy-Sellrdquo funding vehicle

Sinking fund for Key Employee buy-out of Employer stock

Creates a lsquobargaining chiprsquo and or lsquolife preserverrsquo in the event of sale merger or acquisition

Non-Traditional Motivation

Owner Motivated Plans

For Agent Use Only

Needs more money at retirement

Needs more money before retirement (aka ldquoin-service distributionrdquo) ndash CAUTION 409A

Canrsquot maximize 401(k) plan

Replaces plan with prior employer

Alternative to equity in privately-owned company


Employee Motivated Plans

For Agent Use Only



C Corporations (10+ EEs amp $5M+ Revenue)

3 or more non-owner key employees

Business continuation plan

Financially sound hellip stable cash flow

Non-cyclical industry

Concerned owners

Best Prospect

For Agent Use Only

C-Corp WITH an existing plan

Plan NOT in compliance with DOL

Plan NOT in compliance with ERISA

Plan NOT in compliance with 409A

Look for the three Irsquos

1 Plan design INAPPROPRIATE

2 Plan funding INADEQUATE

3 Plan administration INACCURATE

Next Best Prospect

For Agent Use Only

Service after the sale = persistency

Tracking Reporting and Accounting are

just as important in a small company as in

a big one

Accountants like to ldquoAuditrdquo not ldquoPreparerdquo

Outsourcing is the standard

Seemless Outsourcing through NFP Portal

Pangburn Deferralcom etc

hellip a word about

Administration

For Agent Use Only



Prospects For NQDCIndustry Opportunities

bull Community Banks

bull Not-for-profit organizations

bull Locally owned franchises

bull Sales Companies

bull Food Distribution Services

bull Manufacturing Companies

bull Outsource Companies For Agent Use Only

What it takes to be in this market

Knowing People

not

Knowing Product

For Agent Use Only

Pre Qualify Suspect move to Prospect

Complete a client Executive Benefit Design Questionnaire

Complete a Client Profile ldquoChecklistrdquo

Get a Completed Census

Set up first meeting or Conference call with

CFO CEO President Owner andor Majority Shareholder

Work with your Home Office or marketing distributor to help you build the case

What You Need You To Do

For Agent Use Only



Prospecting Questions

bull Would your employees like to defer more money than their 401K allows

bull Are you having retention problems

bull As an employer if you could provide a benefit that was cost neutral would you do it

bull As a business owner would like to have a plan that looks smells and feels like an unlimited ROTH IRA

bull (BOLI Only) If you could get a better return on your investments and finance your employee benefits with the same money would you

For Agent Use Only

How to Reach Your Target

Develop Strategic Alliances

ndash Attorney

ndash CPA

ndash PampC AgentAgency

ndash Qualified TPA

ndash Bank Director

ndash Your Community Bank

ndash ASPA ( Actuary) or

ndash Have existing relationship

For Agent Use Only

Research and Marketing

Websites

bull wwwSchiffBenefitscom Schiff Benefits Group

ndash Articles

ndash Census Sheets

ndash Marketing Material

ndash Latest Updates on 409A and COLI

bull wwwfdicgov Bank Information

bull wwwfreeerisacom Qualified Plan and Non-Qualified

Plan Information

For Agent Use Only

Schiff

1 - Schiff Matt PPT 10-31-16_REV 3-29



Matthew E Schiff CLU ChFCCreating Unique Benefits for Business Owners

and Their Employees

Donrsquot get caught by surprise

For Agent Use Only

Our Story

For Agent Use Only





Design



For Agent Use Only


Expertise

Accounting

Actuarial

Administration



Legal (outsourced)

Systems (TPAs)

Tax (outsourced)

For Agent Use Only



For Agent Use Only




For Agent Use Only


Executive

Supplemental Life

Insurance

Supplemental

Retirement Income





For Agent Use Only

Target Markets









Business Entities




For Agent Use Only








Deferral Program


BOLI

GVUL





For Agent Use Only


the employee

Corp


100

FAS

DBO

For Agent Use Only

SERPs

Yes = 84

No = 16





COLI



For Agent Use Only

COLI - analogy


For Agent Use Only

COLI can provide


wherewithal



coverage


For Agent Use Only






dollars

Corp


100

FASDBO


May or may

not insure

all

participants

For Agent Use Only




(Discriminatory)






For Agent Use Only



THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff






Design



For Agent Use Only


Expertise

Accounting

Actuarial

Administration



Legal (outsourced)

Systems (TPAs)

Tax (outsourced)

For Agent Use Only



For Agent Use Only




For Agent Use Only


Executive

Supplemental Life

Insurance

Supplemental

Retirement Income





For Agent Use Only

Target Markets









Business Entities




For Agent Use Only








Deferral Program


BOLI

GVUL





For Agent Use Only


the employee

Corp


100

FAS

DBO

For Agent Use Only

SERPs

Yes = 84

No = 16





COLI



For Agent Use Only

COLI - analogy


For Agent Use Only

COLI can provide


wherewithal



coverage


For Agent Use Only






dollars

Corp


100

FASDBO


May or may

not insure

all

participants

For Agent Use Only




(Discriminatory)






For Agent Use Only



THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff





For Agent Use Only


Executive

Supplemental Life

Insurance

Supplemental

Retirement Income





For Agent Use Only

Target Markets









Business Entities




For Agent Use Only








Deferral Program


BOLI

GVUL





For Agent Use Only


the employee

Corp


100

FAS

DBO

For Agent Use Only

SERPs

Yes = 84

No = 16





COLI



For Agent Use Only

COLI - analogy


For Agent Use Only

COLI can provide


wherewithal



coverage


For Agent Use Only






dollars

Corp


100

FASDBO


May or may

not insure

all

participants

For Agent Use Only




(Discriminatory)






For Agent Use Only



THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff









Deferral Program


BOLI

GVUL





For Agent Use Only


the employee

Corp


100

FAS

DBO

For Agent Use Only

SERPs

Yes = 84

No = 16





COLI



For Agent Use Only

COLI - analogy


For Agent Use Only

COLI can provide


wherewithal



coverage


For Agent Use Only






dollars

Corp


100

FASDBO


May or may

not insure

all

participants

For Agent Use Only




(Discriminatory)






For Agent Use Only



THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff




COLI



For Agent Use Only

COLI - analogy


For Agent Use Only

COLI can provide


wherewithal



coverage


For Agent Use Only






dollars

Corp


100

FASDBO


May or may

not insure

all

participants

For Agent Use Only




(Discriminatory)






For Agent Use Only



THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff







dollars

Corp


100

FASDBO


May or may

not insure

all

participants

For Agent Use Only




(Discriminatory)






For Agent Use Only



THE COST OF COLI

For Agent Use Only



The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff




The Market Place

For Agent Use Only









For Agent Use Only








For Agent Use Only








Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff









Concerned owners

Best Prospect

For Agent Use Only









Next Best Prospect

For Agent Use Only




a big one





hellip a word about

Administration

For Agent Use Only












Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff













Knowing People

not

Knowing Product

For Agent Use Only









For Agent Use Only









For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff










For Agent Use Only



ndash Attorney

ndash CPA


ndash Qualified TPA

ndash Bank Director




For Agent Use Only


Websites


ndash Articles

ndash Census Sheets





Plan Information

For Agent Use Only

Schiff


Creating Unique Benefits for Business Owners and Their ... e-handout 5.17.17.pdf · 2017 MDRT...

Documents

Transcript of Creating Unique Benefits for Business Owners and Their ... e-handout 5.17.17.pdf · 2017 MDRT...