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Reward with simplicity

Executive Bonus Plans

©2014 Voya Services Company. All rights reserved. CN0318-16260-0417


Important disclosures

• The Voya™ Life Companies and their agents and representatives do not give tax or

legal advice. This information is general in nature and not comprehensive, the applicable

laws change frequently and the strategies suggested may not be suitable for everyone.

You should seek advice from your tax and legal advisors regarding your individual situation.

• These materials are not intended to and cannot be used to avoid tax penalties, and were

prepared to support the promotion or marketing of the matter addressed in this document.

The taxpayer should seek advice from an independent tax advisor.

• Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN),

ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver

Insurance Company (Denver, CO). Within the state of New York, only ReliaStar Life

Insurance Company of New York is admitted and its products issued. All are members

of the Voya™ family of companies.

• All guarantees are based on the financial strength and claims paying ability of the issuing

insurance company who is solely responsible for all obligations under its policies.


Introducing the Executive Bonus Plan

• Simple Plan Design




• Deduction for Employer





• May avoid § 409A Rules






• Flexibility to Change Timing of Distributions*

*Loans and withdrawals may generate an income tax liability, reduce available cash value and reduce the death benefit or cause the policy to lapse.



*Loans and withdrawals may generate an income tax liability, reduce available cash value and reduce the death benefit or cause the policy to lapse.




• Flexibility to Change Timing of Distributions*

• Not Subject to ERISA


Executive Bonus Plan

• Employer makes premium payments on cash value life insurance policy owned by executive

• Premium Payments treated as taxable income to Executive

• Executive may use policy cash values to supplement retirement income¹

• Policy provides Executive a death benefit²

¹ The policy’s cash values are available to the executive as a source of supplemental retirement income through loans and withdrawals. Loans and withdrawals may generate an income tax liability, reduce available cash value, reduce death benefit or cause the policy to lapse.

² Proceeds from an insurance policy are generally income tax free.


Executive Bonus Plan: How it works

1Employer Executive



1Employer Executive

Voya Life Companies

2



3

1Employer Executive

Voya Life Companies

2



3

1Employer Executive

Voya Life Companies

2 4


Executive Bonus Plan

Potential disadvantages• Immediate taxation to executive• No “golden handcuffs”• No cost recovery available to

employer

Potential advantages• Not subject to ERISA• May not be subject to

409A rules• Cash values may provide

additional funds for retirement • Flexibility on timing of cash

value distributions • Death benefit generally not

taxable as income• Policy not subject to claims by

the employer’s creditors


Thank You!

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