Supplemental Benefit/COLI Programs
' + 'A RETIREMENT PLAN OPTION THAT IS GAINING POPULARITY '
+ ' IN THE PUBLIC SECTOR IS A DEFERRED COMPENSATION PLAN CALLED '
+ ' THE CORPORATE OWNED LIFE INSURANCE PLAN, OR COLI. Corporate'
+ ' Owned Life Insurance is an attractive investment alternative '
+ ' for non-qualified benefits because it allows the company to '
+ ' accumulate an asset on a tax-deferred basis. Companies can '
+ ' establish programs that allow the investment performance of '
+ ' the funding to loosely match the investment allocation selected '
+ ' by participants by using variable life insurance products.
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+ ' 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. One common source of '
+ ' tracking error is company stock, which is difficult to shadow '
+ ' with a mutual fund. If the unfounded liability grows too large, '
+ ' management is faced with the prospect of making contributions '
+ ' to "true up" the balancing act.
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+ ' DeMarche specializes in helping its clients understand the '
+ ' expected performance characteristics of different 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. This includes evaluating performance versus '
+ ' appropriate benchmarks and peer groups. DeMarche has 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 overlap. Through a partnership with William '
+ ' Lynch & Associates, a leading insurance consulting firm, '
+ ' DeMarche can provide custom solutions to hedging company stock '
+ ' and determining if you insurance provider is "best of '
+ ' class."
For more information on how DeMarche can ' + ' help you keep your best employees happy and minimize costs ' + ' for your firm, contact ' + ' us.
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