The Principal Financial Group said its new Principal Executive Bonus Plus is a nonqualified plan allowing participants to put after-tax money into mutual funds, life insurance, or annuities.
According to Principal, the plans allow the employer to match or even to offset taxes paid on the employees’ plan contribution. The plan’s design and features are specifically focused at small and mid-sized companies.
The company listed these advantages for employers:
- tax-efficient, in that employer contributions made to the plan are currently tax-deductible
- cost-effective, with no administrative fees, while also being exempt from annual ERISA reporting requirements.
As for executives, Principal noted the program is:
- employee-owned, in that the employee owns and controls the benefit
- flexible, by providing employers the ability to offer a variety of investment and insurance options
- accommodating of survivor benefits
- tax efficient, since earnings accumulate on a tax-deferred basis.