Special Pay Deferral Plan

A Special Solution for Special Pay:
PelionBenefits, Inc. is pleased to describe our program that lets clients distribute unused sick pay and vacation pay to retiring employees in a way that defers taxes for them and saves money for both the Employer and the Employee. It is the Special Pay Deferral Plan.

Savings for You and Your Employees:
Here is how it works. Instead of paying your employee the unused special pay with a check, you pay the amount into the Special Pay Deferral Plan. Since you have not paid the money to the employee as income, there are no income taxes to withhold or FICA contributions to withhold and match. This means substantial savings for both you and your employee. Your employee then has the option to withdraw this pay from the plan or defer tax on this money by allocating it among the investment options of the plan's funding vehicle.

Tax-Deferred Growth:
Any growth your employees’ money realizes in the plan is tax-deferred until they make withdrawals from their account. And if the plan is funded using a benefit-sensitive group contract, employees will have immediate access to all or part of their account through withdrawals and loans without any surrender charges. Distributions prior to age 59 1/2 may be subject to a 10% early withdrawal penalty by the IRS.

A Broad Range of Investment Options:
Each one of your employees has unique investment objectives. To help them meet their individual financial goals, your investment advisor will usually offer investment options from well-known fund managers that may include guaranteed fixed interest accounts, conservative and moderate investment options, and also aggressive growth funds. If your employees’ investment objectives change, they can reallocate their money among the investment options at no cost and tax-free. This gives your employees the options they need to build a dependable, personalized investment program.

Complete Administration at No Cost to You:
Once you adopt the Special Pay Deferral Plan, all administration - employee contributions, asset allocation, financial statements, loan processing, and more - is provided by PelionBenefits, Inc., at no cost to you. The fees are usually fully paid under terms of the Annuity Contract. J. D. Benefits, Inc. has been furnishing professional, timely qualified employee benefit plan administration since 1981. The only time you might incur a cost would be if you shifted the entire plan to another investment custodian, and surrender charges are assessed.

Helps Recruiting and Retention:
The Special Pay Deferral Plan can be a boon when it comes to attracting talented new employees and retaining valuable employees already on your payroll. In addition, by giving your employees a new and effective way to provide for retirement, the plan also helps raise the overall morale of your workforce.

A Special Array of Benefits:

• Defers Federal, State, and Local Income Taxes
• No FICA Contributions or Medicare Taxes for You or your Employees
• Complete Plan Administration at No Cost to You
• No Worrying about IRS Compliance
• Mandatory Employee Participation
• Immediate Employee Access to Funds
• No Surrender Charges for Employees unless Contract is surrendered.
• Investment Options from Leading Fund Managers
• Retiring Employees have Access to Advisor when Concern about their Financial Status is Greatest
• No Confusing Competition from Other Advisors

For Further Information:
If you are interested in exploring how the Special Pay Deferral Program could benefit your organization, contact your representative today. He or she will be happy to provide you with all the information and material you will need to implement this program.