retirement protection plus*

Retirement Protection Plus*Protection for Retirement Plan Contributions

8562-11-092009-11697

FOR PRODUCER USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC.

*Disability income products underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America,

New York, NY (Guardian). Product provisions and features may vary by state.

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Retirement Planning: A Critical Issue for Everyone

• Planning and saving for retirement is one of the most critical financial issues that we all face

• But to complete the plan and assure an adequate retirement income you must be able to work and contribute to that plan

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Your Retirement Plan is Vulnerable

A disabling injury or illness is a serious threat to one’s ability to earn a living…

and ability to make retirement contributions.

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Your Retirement Plan is Vulnerable

• Contributions continue only as long as you remain on the payroll

• Group and individual disability insurance do not normally cover retirement plan contributions

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What’s the Impact?

Individual age 35 works to age 65 and makes $1,500 monthly contributions to a defined contribution plan.

*Assumes annual rate of return of 8% on retirement contributions with no disbursements taken prior to age 65. This rate is for Illustration purposes only. Actual results may vary.

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

35 40 45 50 55 60 65Age

$2,235,539*

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Retirement Protection Plus

• Helps to protect retirement income in the event of a serious disability

• Pays benefits to replace lost retirement plan contributions

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Retirement Protection Plus Program: What is it?

• A way to use the ProVider Plus policy to help protect your retirement plan.

• Stand-alone policy* or by rider

• May replace up to 100% of an employee’s retirement plan contributions, plus the employer’s match

• Not a pension plan or a substitute for one

*The stand-alone policy is not available in CA; the rider is not available in NJ or NY.

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How It Works

• Benefits are paid directly into a special trust

• Trustee is Berkshire Bank, Pittsfield, MA

• Trust assets are invested by trustee at your direction

• Trust assets distributed at age 65

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Retirement Protection Plus Program: How it works

• Coverage is fully underwritten, but issued separately from any other coverage

• Over and above normal issue and participation limits

• Can be employer-pay or individual-pay

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RPP Program Guidelines

• Definition of disability: Own occupation and not gainfully employed

• Elimination periods: 6 or 12 months

• Benefit period: to age 65

• Available to occ classes 6 – 3; 6M – 3M

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• Maximum benefit: $4,090 per month• accommodates 2010 maximum defined contribution

limits of $49,000

• higher amounts may be considered

• Catch-up contributions covered for age 50+ (up to $4,550 per month)

• Minimum issue amount: $500 per month

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• Issue limits: • Employee-paid premiums

• Up to 100% of current total employee and employer contributions

• Employer-paid premiums• 133% of current total employee and employer contributions

• Limited to current maximum issue limit

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Stand-alone RPP Policy: Riders Available

• COLA (3% or 6%)

• Future Increase Option (FIO)• Up to 2X base policy

• Total coverage not to exceed $6,000 per month

• If FIO is not applied for, the Automatic Benefit Enhancement Rider may be attached

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• Benefit amount issued may include:• EE contribution

• ER match

• All current discounts apply• Multi-policy, ER sponsored, association

• Classes of risk: Preferred, Select, Standard

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Eligible Retirement Plans

• Profit sharing plans

• Money purchase plans

• Employee Stock Ownership Plans (ESOP)

• 401(k), 403(b), 457 plans

• IRAs & Roth IRAs

Note: Plan must be in effect and funded for at least one year.

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Eligible Retirement Plans

• Simplified Employee Pensions (SEP)

• SIMPLE plans

• Keogh plans

• Non-qualified deferred comp arrangements• considered only on a case-by-case basis

Note: Plan must be in effect and funded for at least one year.

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Non-eligible Retirement Plans

• Deferred Stock Option Plans

• Government retirement plans• Federal Employees Retirement System (FERS)

• Civil Service Retirement System (CSRS)

• Public Employees Retirement System (PERS)

• State Teachers Retirement System (STRS)

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Non-eligible Retirement Plans

• SERPS (Supplemental Employee Retirement Plans)

• Most Defined Benefit plans• Small business defined benefit plans may be eligible

(1-3 principals).

• Insurance-funded plans with waiver of premium

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Markets for RPP

• Existing clients• Individuals who are contributing to a qualified plan

• High-income professionals & executives • Medical professionals who have “maxed out”

on DI coverage

• Attorneys, dentists, CPAs, etc.

• Business clients with a retirement plan

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Opportunity: Talk with CPAs

• CPAs advise their clients about retirement plans

• They appreciate being kept up-to-date on latest offerings to help their clients

• Distinguishes you in the eyes of the CPA

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Opportunity: RPP in a Worksite Program

• RPP coverage on a guaranteed standard issue basis

• Employer-pay or voluntary plans

• Minimum of…• 10 covered employees if employer-paid

• 75 eligible employees if voluntary

• Uses Income ProVider policy

• A terrific opportunity to offer GSI coverage to medical market clients

Ask us for more details onour Worksite DI program

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RPP Underwriting Guidelines

• Normal medical underwriting guidelines apply

• If fully underwritten DI policy was issued in the last 6 months by us…

• completed non-medical

• documentation of retirement contributions, if required

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• If applicant has total in-force coverage that is above our current I & P limits for his or her income, we will not count the first $500 against the amount of monthly indemnity issued under the RPP program

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• Self-employed professionals and business owners generally may include pension contributions when applying for basic DI coverage

• If contributions are included in earned income, RPP coverage is not permitted

• If pension contributions are excluded from earned income, RPP coverage is permitted

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• Total earned income: $300,000

• Includes pension contributions of: $45,000

• Option 1: Insure $300,000 at $10,700/mo.(assumes individual pay)

• Option 2: Insure $255,000 at $9,800/mo. plus RPP coverage of $3,750.

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$0

$3,000

$6,000

$9,000

$12,000

$15,000

Option 1 Option 2

ProViderPlus

$10,700

ProViderPlus

$9,800

RPP$3,750

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Application Requirements

• Application for Insurance (DI-2007)

• For stand-alone policy:• Complete the RPP program Supplement (DI-RPP-2007)

• For RPP Disability Benefit Rider:• Indicate on the IDI Supplement (DI-TDI-2007)

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Financial Documentation

• RPP program requires standard financial underwriting documentation

• No proof of retirement contributions required if applying for…

• Up to 15% of earned income (individual-pay)

• Up to 19% of earned income (employer-pay)

• For greater amounts, documentation of plan’s existence, adoption date & employer match

• For GSI Worksite cases, we will accept an electronic census providing current employee and employer contributions

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RPP Documents

• Authorization & Irrevocable Assignment• Authorizes establishment of trust

• Authorizes exchange of information

• Assigns to trust the right to receive benefits

• Certifies that client has received Disclosure Statement

• Disclosure Statement• Given to the applicant

• Outlines tax issues

• Investment management fees (by investment companies)

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RPP Documents

• Declaration of Trust• Sample Declaration of Trust may be given to client.

• The actual Declaration of Trust will be executed at the time of disability

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RPP Documents

• RPP Contribution Worksheet• For non-owner employees

• Helps you and the applicant calculate the appropriate applied for amount of monthly benefit

• Not required, but may be submitted with the application for the underwriter’s use

• All documents are available at www.berkshirelifetools.com

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Berkshire Bank

• Client directs investments of trust asset• Select from one of more than 200 equity or fixed income

funds available through Federated Investors (www.federatedinvestors.com)

• Personal management, full access to capital markets available for trust assets that exceed $100,000

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Tax Issues

• Policy benefits… • Individual pay: benefits are non-taxable

• Employer pay: benefits are taxable

• Trust earnings are taxable to the insured, as the beneficiary of the trust.

• If policy owner chooses an annuity, there is generally no tax on earnings

This publication is provided as a courtesy by Berkshire Life Insurance Company of America and does not modify the provisions of any policy. It is offered for the purpose of education and information only and is not intended to constitute tax or legal advice. For information on your specific situation, please consult your personal legal or tax advisor.

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Tax Issues

• Trust reports taxable earnings each year• Form 1099 issued to insured

• Trust will reimburse insured for any taxes paid• upon written request

• may also reimburse the insured for taxes due on employer-paid benefits

• At distribution: no income tax on funds distributed by the trust for which taxes have been paid

This publication is provided as a courtesy by Berkshire Life Insurance Company of America and does not modify the provisions of any policy. It is offered for the purpose of education and information only and is not intended to constitute tax or legal advice. For information on your specific situation, please consult your personal legal or tax advisor.

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RPP Marketing Tools

• Producer Guide

• Letters

• Brochures

• Imprintable flyers

• Sales presentations for employer & employees

• Byline articles

Retirement Protection Plus*Protection for Retirement Plan Contributions