Corporate/Business Planning
Group RSPs
Group RSP plans are structured to provide the employees of a particular company with the ability to have automatic savings combined with company payroll. In many cases, employers will match employee contributions up to a certain level. This can be a much more cost effective compensation tool than straight salary increases. We have tools that can show you the potential cost savings for your company and we have access to a multitude of different investment companies offering such plans.
Disability Insurance
From a corporate perspective, disability insurance becomes of great concern and usually fairly complicated as policy riders and provisions become increasingly important. Corporate disability can range from insuring a principle key person in the business to funding the buy-out of a partner in the event that they are disabled for an extensive period of time &/or they are disabled to the point that they can no longer carry out the tasks that they provided to the company.
Investments
Investing in portfolio securities within a corporation is a potentially attractive strategy as a business owner/board can take advantage of the potential for higher rates of return. However, as corporate taxation is more complicated than personal income taxation, joint work between the accountant and an investment advisor, who is experienced in this area, should always be undertaken. We have many corporate investment clients, and as such, can provide the experience that is required in this area.
Individual Pension Plan (IPP)
Business owners, key executives and professionals with Professional Corporations face a problem most other employees do not. How can they build assets large enough to maintain the same lifestyle upon retirement when the rules governing Registered Retirement Savings Plans (RRSP) and Registered Pension Plans (RPP) severely restrict them? Business owners may have the additional problem of trying to move funds out of the business tax-efficiently.
What is an IPP?
An IPP is a personal defined benefit pension plan, with benefits taxed upon receipt, by the member. The plan allows for the potential to accumulate a greater amount of assets than in an RRSP. Plan contributions are determined by an actuary to provide sufficient assets at retirement. Contributions are made by the plan sponsor (the company), and all expenses for setting up and funding the plan are deductible by plan sponsor. The plan has full creditor protection, and is governed by more prudent investment rules than a RRSP.
Corporate Insured Annuity
Your concern:
Your company, wholly owned by you, has $1,000,000 in securities. Since the paid-up capital is nominal, any distribution of its retained earnings will be treated as a taxable dividend.
How to solve the problem:
You sell the securities and acquire a single premium immediate life annuity with no guarantee on a non prescribed basis. As you are in your late sixties a large proportion of the income is a return of capital.
You now use a portion of the proceeds to pay the premiums on a $1 million policy on your life. At your death, the annuity payments cease and the company receives $1,000,000 from the life policy.
If your shares have been left to your wife or in a spousal trust, the shares roll over with no tax liability. Or, if the company is wound up, either party will receive a tax-free dividend out of the Capital Dividend Account.
Buy-Sell Agreement Funding Solutions
Protecting your business is an essential part of preserving your estate. When an active shareholder in a business can no longer participate in the business, it's important that the other shareholders have a plan in place to continue the business. A Buy-Sell agreement ensures that money is available to buy a deceased partner's share of the business, using life insurance as the vehicle to fund this purchase.
The Challenge:
Business partners want to ensure that if one partner dies, the other partners will be able to purchase the deceased partner's shares from the heirs and continue the business without interruption.
The Solution:
Our Buy-Sell strategy involves a joint first-to-die insurance policy and a completed Buy-Sell agreement. A Buy-Sell agreement is like a "business will" and is a written legal document. Along with your advisor, a lawyer and accountant need to be part of the team when setting up the agreement
People often delay buying life insurance, thinking that they can buy it later. Life insurance is medically and financially underwritten, which means that your eligibility to purchase life insurance along with the amount of protection you can purchase are based on your current health, medical history and ability to pay.
If your health deteriorates or as you age, you may find it difficult or expensive to purchase life insurance.
Employee Benefits
Employers often offer health, dental, life and disability insurance benefits to their employees through employee (group) benefit plans. This decision helps an employer recruit and maintain a solid and secure workforce. However, how much the employer will pay towards these benefits and to how the benefits will be constructed can result in a large difference in cost to the employer. PlanWright Financial can help determine the most advantageous way for employers to offer benefits to their employees at the best price with benefits designed for their unique workplace.
Employee Seminars
Although many employers offer group benefits and retirement plans for their employees, they often do not have the financial planning expertise available in their human resources departments to provide counsel on how their employees should best utilize these benefits and plans according to their own unique situation. PlanWright Financial’s employee seminar provides employees with non-biased basic financial planning knowledge so that employees can make prudent decisions regarding their own unique circumstances.
