Principal Executive Bonus Plus^SM

How it Works

Employer Advantages

• Provides the ability for you to recruit, reward and retain the key employees who contribute the most to your business' continued success.
• Business receives a current tax deduction.
• Agreements may be added to tie the key employee closer to the business.
• Simple, yet flexible, plan design is easy to communicate and maintain.
• Plan is exempt from annual reporting and ERISA requirements.

Employee Advantages

• Overcomes government limitations on the amount highly compensated employees can save for retirement.
• Receive enhanced retirement and/or survivor benefits.
• Employees own the financial asset.
• Minimal cost. The participant's cost is the tax associated with the bonus. This cost may be partially or fully offset with an additional bonus.
• Overall low tax rates.

Employer Disadvantages

• Asset is not corporate-owned.
• Each bonus paid reduces company cash flow.

Employee Disadvantages

• Additional tax if employer's bonus doesn't cover 100% of the tax.
• Employer's bonus may be contingent on continued employment.
• Depending on financial asset selected, annual taxation of earnings may apply.

Approval #8980112007