A 412(i) defined benefit plan, also known as a fully insured plan, is administered under Section 412(i) of the Internal Revenue Service Code. In this plan, a life insurance company guarantees participants’ benefits.
John Hancock’s 412(i) program aims to help small business owners reduce business taxes and fund retirement and life insurance needs, the company said.
The plan, which exclusively features Hancock life insurance and annuity products, offers the highest allowed contributions and tax deduction of any qualified retirement plans available for business owners over age 45, the company said.
The program includes plan services, provided by Berkshire Retirement Services, ranging from IRS-approved plan documents to plan administration.
Hancock officials said their 412(i) plan includes:
- guaranteed lifetime retirement income
- immediate financial protection for the participant’s family in the event of pre-retirement death
- higher contributions and deductions in the early years of the plan, allowing more assets to compound sooner and generating more tax-deferred growth.
The program boasts a simplified plan installation process, complete plan administration, and preparation of annual government filings.
Ongoing maintenance and an automatic annual review will ensure that the plan remains in compliance with tax regulations and reflects changes in the company, such as newly eligible employees, Hancock said.