What requirements must be met to qualify as a 412 Split Funded Defined Benefit Plan insurance contract plan?
• The plan must be funded exclusively with annuity products, or a combination of life insurance and annuity products, issued by an insurance company. • The benefits provided each individual must be equal to the values provided in the contracts and guaranteed by the insurance carrier. • Life insurance dividends and excess annuity interest must be used to reduce the following years plan contribution. • No policy loans are allowed under the contracts. How does the initial deductible contribution required in a Fully Insured 412 Split Funded Defined Benefit Plan compare to a traditional defined benefit plan? See the appendix page that compares the first year contribution levels for a traditional defined benefit to a 412 Split Funded Defined Benefit Plan. These contribution levels are shown from ages 45 to 65. Comparisons are made for plans funded entirely with a combination of annuity and the maximum amount of life insurance available under the incidental insurance rules for qualified plans
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