Time will tell, although 412(e) and its predecessor 412(i) have been part of ERISA since its inception in 1974. For that reason alone, it should not be called a fad. Those questioning its long term viability may be referring to a few practitioners who took aggressive positions with insurance funding years ago. In turn, that triggered a “shut down” of those overly aggressive practitioners by the Internal Revenue Service. However, keep in mind that most plans are designed conventionally, and for that reason the future prospects for the 412(e) market continue to be bright. It is important to match the right solution with the right problem. 412(e) plans are best used for addressing a narrow but deep set of circumstances, meaning that they are not suitable for everyone. However, when they fit, they can produce excellent results. We look forward to the market continuing to develop on those terms.
Posted in: 412(e)(3) Plan Specific
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