The Best Solution for your Business Retirement Needs

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The Best Solution for your Business Retirement
Needs
John Hancock Retirement Workshop
Insurance products are issued by John Hancock
Life Insurance Company, Boston, MA and
securities offered through Signator Investors,
Inc., through other broker/dealers appointed by
Signator Investors, Inc., 197 Clarendon Street,
Boston, MA 02116.
QRP-1128 5/05
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Workshop Objectives

• Importance of Retirement Planning
• Qualified Retirement Plans
• The Best Plan For You?
• Our Consultative Approach
• Advantages of Starting Now

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Potential Sources of Retirement Income
Social Security
Employer-sponsored plans
Personal savings and investments
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What Are Your Retirement Planning Objectives?

• Tax benefits?
• Retirement savings for you and your employees?
• Convenience in saving?
• Professional money management?
• Financial direction?

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What Is A Qualified Plan?

• Approved by IRS
• Established and Maintained by Employer
• Permanent and Continuing Arrangement
• Cannot Discriminate in Favor of Highly
  Compensated Employees

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Why a Qualified Plan?

• Contributions Are Deductible

Contribution 50,000 Tax Bracket 35 After-tax
Cost 32,500 Tax Savings 17,500
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Why A Qualified Plan?

• Assets accumulate on a tax-deferred basis
• No current tax to plan participants

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Why A Qualified Plan?

• Favorable Tax Treatment at Distribution
• IRA Rollover
• Continue to defer taxes
• You choose distributions

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Why A Qualified Plan?

• Assets not subject to claims of creditors
• ERISA and IRC anti-alienation provision
• U.S. Supreme Court (Patterson vs. Shumate, 1992)
• U.S. Supreme Court (Yates vs. Herndon, 2004)
• Common-law employees?

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Why A Qualified Plan?

• Helps Attract Capable Employees
• May Reduce Employee Turnover

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EGTRRA

• Small Business Incentives
• 100 employees or less
• Tax credit of 50 (500 maximum)
• Start-up and administration expenses
• First three years of plan

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Retirement PlanningIt Can Be A World of Worries

• Way too much to learn!
• What if something goes wrong?
• Which plan is best for me?

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John Hancock Consultative Approach

Recordkeeping Administration
Your Company
Simplified Establishment Process
Investment Management
Periodic Review
Plan Design Services
Identify Business Owner Goals
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Our Consultative Approach
Your Company
Identify Business Owner Goals
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Customize a Retirement Plan Based on YOUR Goals
Objectives

• Design Benefits in Favor of Business Owner and
  Key Employees
• Maximize Company Tax Savings
• Retain Key Employees
• Provide Value Added Employee Benefit
• Keep Pace With the Competition
• Receive Financial Direction for your Retirement

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Our Consultative Approach
Your Company
Plan Design Services
Identify Business Owner Goals
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Plan Design

• Cannot Discriminate in Favor of Highly
• Compensated Employees
• Creative Plan Design to Favor the Business Owner

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Creative Plan Design

• What Type of Plan is best for your business?
• Eligibility Requirements
• Vesting Schedules

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Plan Design Services for The Small Business
Market
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Plan Design for Small Business/Professionals
Data Gathering Form
Qualified Retirement Plans Group

• Defined Contribution
• Profit Sharing
• Integrated
• Age-Weighted
• New Comparability

• Defined Benefit
• Traditional
• 412(i)

Plan Illustration
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Qualified Retirement Plans Marketing
Step 1
Consult
Step 2
Design
Step 3
Illustrate
Step 4
Install
Step 5
Administer
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Which Plan is Best For You?

• Profit Sharing
• Defined Benefit
• 412(i) Fully Insured Defined Benefit

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Profit Sharing Plans

• Favors Younger Business Owners
• Flexible Contributions
• Plan Contribution --lesser of
• 100 of Annual Compensation
• 42,000
• Age-Weighted
• New Comparability

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Defined Benefit Plan

• Favors older business owners
• Monthly retirement benefit established in advance
• Contribution is actuarial amount needed to
  provide benefit
• More than 42,000 annual contribution/deduction

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412(i) Fully Insured Defined Benefit Plans

• Favors older business owners
• Benefits are guaranteed by John Hancock
• Highest deductible contribution allowed by law
• Contributions decrease over time
• Less expensive to maintain

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Why 412(i)?

• Benefits guaranteed
• Zero market risk
• Conservative element of your investment portfolio
• Only plan that allows older business owners to
  save enough for retirement

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Retirement Plan Funding
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Funding Options

• Annuities
• Fixed
• Variable
• Life Insurance
• Whole Life
• Universal Life
• Variable Life

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Advantages of Annuities

• Lifetime income options
• Guaranteed death benefit
• Investment choices/flexibility
• Asset allocation
• Asset re-balancing

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Life Insurance in a Qualified Plan

• Two solutions for price of one
• Saving for retirement
• Self-completion feature
• Premiums tax-deductible
• Discounted dollars

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Advantages of Life Insurance

• Allows premiums to be paid on a tax-deductible
  basis
• Provides immediate financial protection for the
  participants family in the event of
  pre-retirement death
• Death proceeds in excess of the cash value are
  received income tax-free to beneficiaries

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Our Consultative Approach
Your Company
Simplified Establishment Process
Plan Design Services
Identify Business Owner Goals
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Simplified Establishment Process

• Simple, step-by-step Installation Package
• Itemized procedures
• Signature-ready forms
• On-line assistance
• IRS Determination Letter

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Our Consultative Approach
Recordkeeping Administration
Your Company
Simplified Establishment Process
Plan Design Services
Identify Business Owner Goals
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Record-keeping Administration

• Turnkey Package
• Berkshire Retirement Services
• Hancock/Berkshire Coordination
• All IRS requirements
• All Government reporting

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Service you should expect!

• Simplified plan installation process
• Turnkey plan services
• Competitive fee structure
• Annual plan review

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Our Consultative Approach
Recordkeeping Administration
Your Company
Simplified Establishment Process
Investment Management
Plan Design Services
Identify Business Owner Goals
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Investment Management

• Death benefit protection plus potential wealth
  accumulation
• Choice of Nations leading asset managers
• Broad array of investment options

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Our Consultative Approach
Recordkeeping Administration
Your Company
Simplified Establishment Process
Investment Management
Periodic Review
Plan Design Services
Identify Business Owner Goals
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Redefine Your Needs

• What is your time horizon?
• Level of risk you are willing to take?
• What are your investment goals?
• Right asset mix?

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Annual Administration Review

• Calculate benefits for new/old participants
• Provide schedules for deductible
  increases/additions
• Prepare individual employee statements
• Issue new records for your files

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The Advantages of Starting Now
Assumptions 1. 5,000 is contributed every
year. 2. 8 interest rate. 3. Accumulation at age
65.
AGE 25. 1,398,905
AGE 26 1,290,283
AGE 35. 611,729
AGE 45. 247,115
...... AGE 36 561,416
....... AGE 46 223,810
This chart is for illustration purposes only and
does not represent the performance of any
particular investment. Actual product fees and
charges may affect the performance. A 10 IRS
penalty may apply to amounts withdrawn before age
59 1/2. Some states may impose a state premium
tax on annuity products. Regular investing does
not assure a profit and does not protect against
losses in a declining market.
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Where Do You Go from Here?

• Procrastinate?
• Do it yourself?
• Work with others?
• Work with us

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THANK YOU