Section 404.--Deduction for Contributions of an Employer to an Employees’ Trust or Annuity Plan and Compensation Under a Deferred Payment Plan (Also, §§ 401, 412, 6011, 6111, 6112; §§ 26 CFR 1.401-1, 1.412(i)-1, 1.6011-4, 301.6111-2, 301.6112-1.) Rev. Rul. 2004-20 ISSUES Issue 1: Can a qualified pension plan be a plan described in § 412(i) of the Internal Revenue Code if the plan holds life insurance contracts and annuity contracts for the benefit of a participant that provide for benefits at normal retirement age in excess of the participant’s benefits at normal retirement age under the terms of the plan? Issue 2: If a qualified pension plan holds life insurance contracts providing for life insurance on a participant’s life in excess of the participant’s death benefit under the terms of the plan, are contributions for premiums for such excess life insurance coverage currently deductible by the employer? FACTS Situation 1 Employer M maintains Plan A, a defined benefit plan that is funded solely by life insurance contracts and annuities with level annual premiums for each participant commencing with the date the individual becomes a participant in the plan (or, in the case of an increase in benefits, commencing at the time the increase becomes effective) and ending with the individual’s attainment of normal retirement age. Plan A is intended to be a plan described in § 412(i). The amounts that will be accumulated under the insurance contracts and annuity contracts for the benefit of a participant at normal retirement age, assuming premiums are paid and
Section 404.--Deduction for Contributions of an Employer to an Employees’ Trust or Annuity Plan and Compensation Under a Deferred Payment Plan (Also, §§ 401, 412, 6011, 6111, 6112; §§ 26 CFR 1.401-1, 1.412(i)-1, 1.6011-4, 301.6111-2, 301.6112-1.) Rev. Rul. 2004-20 ISSUES Issue 1: Can a qualified pension plan be a plan described in § 412(i) of the Internal Revenue Code if the plan holds life insurance contracts and annuity contracts for the benefit of a participant that provide for benefits at normal retirement age in excess of the participant’s benefits at normal retirement age under the terms of the plan? Issue 2: If a qualified pension plan holds life insurance contracts providing for life insurance on a participant’s life in excess of the participant’s death benefit under the terms of the plan, are contributions for premiums for such excess life insurance coverage currently deductible by the employer? FACTS Situation 1 Employer M maintains Plan A, a defined benefit plan that is funded solely by life insurance contracts and annuities with level annual premiums for each participant commencing with the date the individual becomes a participant in the plan (or, in the case of an increase in benefits, commencing at the time the increase becomes effective) and ending with the individual’s attainment of normal retirement age. Plan A is intended to be a plan described in § 412(i). The amounts that will be accumulated under the insurance contracts and annuity contracts for the benefit of a participant at normal retirement age, assuming premiums are paid and
ReplyDeleteSection 404.--Deduction for Contributions of an Employer to an Employees’ Trust or
Annuity Plan and Compensation Under a Deferred Payment Plan
(Also, §§ 401, 412, 6011, 6111, 6112; §§ 26 CFR 1.401-1, 1.412(i)-1, 1.6011-4,
301.6111-2, 301.6112-1.)
Rev. Rul. 2004-20
ISSUES
Issue 1: Can a qualified pension plan be a plan described in § 412(i) of the Internal
Revenue Code if the plan holds life insurance contracts and annuity contracts for the
benefit of a participant that provide for benefits at normal retirement age in excess of the
participant’s benefits at normal retirement age under the terms of the plan?
Issue 2: If a qualified pension plan holds life insurance contracts providing for life
insurance on a participant’s life in excess of the participant’s death benefit under the
terms of the plan, are contributions for premiums for such excess life insurance
coverage currently deductible by the employer?
FACTS
Situation 1
Employer M maintains Plan A, a defined benefit plan that is funded solely by life
insurance contracts and annuities with level annual premiums for each participant
commencing with the date the individual becomes a participant in the plan (or, in the
case of an increase in benefits, commencing at the time the increase becomes
effective) and ending with the individual’s attainment of normal retirement age. Plan A
is intended to be a plan described in § 412(i). The amounts that will be accumulated
under the insurance contracts and annuity contracts for the benefit of a participant at
normal retirement age, assuming premiums are paid and
ReplyDeleteSection 404.--Deduction for Contributions of an Employer to an Employees’ Trust or
Annuity Plan and Compensation Under a Deferred Payment Plan
(Also, §§ 401, 412, 6011, 6111, 6112; §§ 26 CFR 1.401-1, 1.412(i)-1, 1.6011-4,
301.6111-2, 301.6112-1.)
Rev. Rul. 2004-20
ISSUES
Issue 1: Can a qualified pension plan be a plan described in § 412(i) of the Internal
Revenue Code if the plan holds life insurance contracts and annuity contracts for the
benefit of a participant that provide for benefits at normal retirement age in excess of the
participant’s benefits at normal retirement age under the terms of the plan?
Issue 2: If a qualified pension plan holds life insurance contracts providing for life
insurance on a participant’s life in excess of the participant’s death benefit under the
terms of the plan, are contributions for premiums for such excess life insurance
coverage currently deductible by the employer?
FACTS
Situation 1
Employer M maintains Plan A, a defined benefit plan that is funded solely by life
insurance contracts and annuities with level annual premiums for each participant
commencing with the date the individual becomes a participant in the plan (or, in the
case of an increase in benefits, commencing at the time the increase becomes
effective) and ending with the individual’s attainment of normal retirement age. Plan A
is intended to be a plan described in § 412(i). The amounts that will be accumulated
under the insurance contracts and annuity contracts for the benefit of a participant at
normal retirement age, assuming premiums are paid and