|Also, the custom
plan can incorporate a companion 401 (h) plan which at retirement can provide
health, long term care, and medicare supplement insurance on a pre-tax basis.
businesses with existing plans can more readily integrate existing plans and
a set of benefits and future payments with a newly designed 412 (i) plan.
|It provides participants
with disability income as well as death benefit protection.
|Also, it is possible to
customize the drafting of how employees can enter the plan. Do you want them to have immediate
vesting, or do you want to delay the period where their benefits vest. Do you want to their entry date in the
plan to be delayed for a year, or not.
In some cases, we can do that.
In fact, in one case we had last year, the business owner was able to
delay her employees plan participation to this year and she got the entire
deduction for 2002.
|And, of course, as we noted
earlier, the custom plan provides the opportunity for larger plan
contribution deductions for the owner and less for the employees, if the
owner so desires. With a prototype
the contributions will not only be smaller, but a considerably larger portion
will be allocated for the employees.
This could amount to tens of thousands of dollars, and some cases
hundreds of thousands of dollars in savings.
And, when you compare this with the meager cost differential of a
prototype, the custom is actually much more efficient and economical.