Sponsors that have retirement plans that are fully funded by guaranteed life insurance contracts or annuities should contact us immediately regarding new IRS rules applicable to these plans (often referred to as 412(i) plans).  Before the IRS issued these new rules, sponsors of 412(i) plans, could maximize their plan contributions while minimizing the tax liability for plan participants.  These insurance contracts were often designed to create a benefit that would balloon to a much higher value after the date the contract was distributed or sold to the participant.  Also, these 412(i) plans often purchased life insurance contracts with payouts larger than the amount due to a participant's beneficiary, which resulted in large payments to the plans upon the death of the covered participant.  These plans could then use the proceeds for many reasons, including increasing the benefits for the remaining plan participants. 

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