Supplemental Benefit/COLI Programs

Corporate Owned Life Insurance, or COLI, is an attractive investment alternative for non-qualified benefits. It allows the company to accumulate an asset on a tax-deferred basis and recover the costs associated with deferred compensation plans and supplemental executive retirement plans.

A key issue of concern to many companies offering a COLI plan is whether or not the participants' investment choices are balanced to minimize tracking error. If their fund options do not closely mirror the returns offered within the COLI, an asset/liability mismatch can occur.

DeMarche specializes in helping its clients understand the expected performance characteristics of different stocks and manager styles and the funds they manage. DeMarche can assist in optimizing the funds on each side of your COLI program to minimize tracking error and, therefore, an underfunded status requiring added contribution. We can evaluate performance versus appropriate benchmarks and peer groups using a family of factor-models that help identify style drift in portfolios. DeMarche has the ability to closely examine the actual holdings in fund and evaluate duplication. Through a partnership with William Lynch & Associates, a leading insurance consulting firm, DeMarche can provide custom solutions to hedging company stock and determining if your insurance provider is "best of class."