412e3 (formerly 412i) Plans

[Gary]

I have a 1 participant/owner 412i plan.

The uncertainties in such a plan are:

projected cash values of life insurance policies, and

distribution option chosen (eg. insurance provided annuity, distribution of policy, lump sum)

Of course we can't exceed 415 and we don't want a surplus upon distribution.

Plan is funded 50% with annuity contract and 50% with life insurance contract to meet incidental death benefit requirement.

Suggested plan document techniques (from a conceptual standpoint not from an exact language standpoint) include:

Accrued benefit be equal to the benefit provided by the accumulated values (i.e. cash value and accumulated value of the two policies) at determination date.

Of course the benefit differs based on the plan distribution.

Normal retirement benefit equal to the benefit provided by the accumulated values at normal retirement.

Death benefit equal to the life insurance proceeds plus the accumulated value of the annuity contract.

Basically the intent of the above concepts it to ensure that the plan document mirrors how the plan operates.

Curious if there are any other viewpoints out there.