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412e3 conversion to Cash balance plan - guidance reqd


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Looking for guidance to convert 412e3 plan into Cash balance plan. Am a single owner S-corp 44 years with 2 years into 412(e)3 plan with Whole life and Annuities.

Life insurance was not required personally and seems foolish now to got sold into policy by the CPA. (should have been a red flag that CPA is the sales agent). I was not even mentioned about the CB plan option that looks more attractive with conservative investment strategies and flexibility compared to 412e3.

Can the 412e3 converted into Cash balance plan instead of Termination? Any references for good companies with this kind of experience will be appreciated.

Goal is to fund the pension plan in 10-12 years instead of stretching for 20 years.

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Being 412e3, you do not get the judgement of an experienced enrolled actuary, "because it is not needed", and the CPA / agent keeps control.

But if you discontinue the 412e3 structure, you have to decide if the future payments to the policy will continue within a cash balance structure.

So I suggest you modify the policy to reduce or eliminate the unneeded death benefits you pay for, but keep paying premiums for cash value buildup.

This will avoid the surrender issues that come from cancelling the policy. If your agent won't do this, switch to a new agent who will, and inform the insurer.

Cash balance plans are well suited to your goals of funding your retirement target sooner rather than later. 

You can keep your rebuilt annuity contract within the plan while funding the additional benefits within a trust.

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