PRM Financial GroupReality-Based Planning™

PRM Financial Group2 Northfield Plaza, Suite 255

Northfield, IL 60093847-386-7692

Fax 847-386-7154e-mail: peter@prmfinancial.com

PRM FINANCIAL GROUPCOMPANY OVERVIEW

• Located in Northfield, IL• Network of Actuaries, TPAs, advanced planning

experts, marketing, sales, & underwriting assistance

• Reality-based planning™ • Dealing with real rather than ideal situations• Provide meaningful employer focused benefits,

meet budgetary restraints, and achieve management strategic goals

• Optimized for today, enduring through tomorrow

PRM FINANCIAL GROUPCOMPANY OVERVIEW

• Serve the benefits, retirement, and tax planning needs of individuals, small businesses and professional companies

• Partner with CPAs, financial and legal consultants, sales professionals, and other advisors to provide individuals and small business clients with a wide range of planning solutions

• Design customized plans that reach the client’s goals while respecting budgetary constraints

PRM FINANCIAL GROUPCOMPANY SERVICES

• Health Insurance• Telemedicine• Individual and Small Business Insurance Planning• Multiplan

• Highly specialized planning concept

• Retirement Plan Comparisons • Analysis of available and appropriate plan options for educated

client decisions

• Single Employer Welfare Plan (SEWP)• An employer sponsored welfare benefit plan• Designed to fund post retirement medical expenses on a pre-tax

basis

PRM FINANCIAL GROUPCOMPANY SERVICES

• Education• Qualified Retirement Plans• 419A(c)(2) Single Employer Welfare Plans• Other relevant, unique, owner-focused concepts

• Marketing Support• Marketing Pieces• E-mail content and/or campaign management• Contact lists and calling programs• Others as needed

PRM FINANCIAL GROUPCOMPANY SERVICES

• Focus for Today…

• Single Employer Welfare Plan (SEWP)•An employer sponsored welfare benefit plan•Designed to fund post retirement medical expenses on a pre-tax basis

PRM FINANCIAL GROUPTHE GOAL

• Help you close more business• We are in the game with you…not on the sideline

• Be a trusted resource and partner for you• Qualified Retirement Plans• 419A(C)(2) Single Employer Welfare Plans• Other relevant, unique, and owner-focused concepts

• Do the dirty work• Gather information and options• Filter through the data• Make the proposals digestible and saleable!• Provide and manage the necessary documents• Underwriting management

PRM FINANCIAL GROUPSINGLE EMPLOYER WELFARE PLAN (SEWP)

• Create Create • Protect Protect

• Preserve Preserve

A stand alone program or companion to A stand alone program or companion to retirement planningretirement planning

PRM FINANCIAL GROUPSEWP: THE NEED

• People are living longer than ever beforePeople are living longer than ever before• There is a 62% chance that at least one spouse can expect There is a 62% chance that at least one spouse can expect

to survive to age 90to survive to age 90

• Health care costs continue to rise faster than rate of Health care costs continue to rise faster than rate of inflationinflation• It has outpaced inflation for 20 years!It has outpaced inflation for 20 years!

• It is widely believed that Medicare is in deep troubleIt is widely believed that Medicare is in deep trouble• Deficit nearly twice as large as the Social Security deficitDeficit nearly twice as large as the Social Security deficit

• In 2010, approximately 24% of a retiree’s after-tax In 2010, approximately 24% of a retiree’s after-tax income was needed to pay for health care costsincome was needed to pay for health care costs• Approx. 29% in 2020Approx. 29% in 2020• Approx. 35% in 2030Approx. 35% in 2030

PRM FINANCIAL GROUPSEWP: THE REASON

• Longer livesLonger lives

• Advances in medical technologyAdvances in medical technology• Leading to better, but more expensive treatmentsLeading to better, but more expensive treatments

• High administration costsHigh administration costs• Fragmented health care delivery and financing systemFragmented health care delivery and financing system

• Existence of many highly paid medical specialistsExistence of many highly paid medical specialists• They are doing amazing things, but it is expensiveThey are doing amazing things, but it is expensive

• Prescription DrugsPrescription Drugs• The number of drugs (expensive) that represent miracle The number of drugs (expensive) that represent miracle

curescures• The number of people who are required to take drug The number of people who are required to take drug

treatmentstreatments

PRM FINANCIAL GROUPSEWP: A SOLUTION

• Post Retirement Medical Planning is a solutionPost Retirement Medical Planning is a solution• This is the only plan that Penn Mutual allowed after This is the only plan that Penn Mutual allowed after

conductingconducting““Third Party Planner” audit Third Party Planner” audit

• Its up to us to help our clients secure their financial Its up to us to help our clients secure their financial futures!futures!• Most people are unaware of this planning conceptMost people are unaware of this planning concept

• Plan today for the costs of tomorrowPlan today for the costs of tomorrow• They are inevitableThey are inevitable

PRM FINANCIAL GROUPSEWP: OVERVIEW

• A Welfare benefit plan designed to fund post A Welfare benefit plan designed to fund post retirement medical expenses on a pre-tax basisretirement medical expenses on a pre-tax basis• Supplements MedicareSupplements Medicare• Allows clients to use their dedicated retirement funds for their Allows clients to use their dedicated retirement funds for their

retirementretirement rather than for medical expenses rather than for medical expenses

• Annual funding contributions accumulate the cash Annual funding contributions accumulate the cash value necessary, at a specific retirement time, to pay value necessary, at a specific retirement time, to pay for medical expenses for the lifetime of the participant for medical expenses for the lifetime of the participant and eligible dependentsand eligible dependents

PRM FINANCIAL GROUPSEWP: OVERVIEW

* When taken for allowable medical expenses

PRM FINANCIAL GROUPSEWP: OVERVIEW

• Contributions are based on Contributions are based on actuarial actuarial calculationscalculations

• Spouses and dependants can be included in Spouses and dependants can be included in plan fundingplan funding

• In the event that the participant does not live to In the event that the participant does not live to retirement or completion of the plan, a death retirement or completion of the plan, a death benefit is paid to the beneficiary benefit is paid to the beneficiary

PRM FINANCIAL GROUPSEWP: OVERVIEW

• Internal Revenue Code Section 419A(c)(2) authorizes Internal Revenue Code Section 419A(c)(2) authorizes current funding of post-retirement life and medical current funding of post-retirement life and medical benefitsbenefits

• Provided that the benefit reservesProvided that the benefit reserves• Are actuarially determinedAre actuarially determined• Are levelly funded over the working lives of participating Are levelly funded over the working lives of participating

employeesemployees

PRM FINANCIAL GROUPSEWP: OVERVIEW

• Medical benefits* may include, but are not limited to:Medical benefits* may include, but are not limited to:

• Premium payments for Medicare Part BPremium payments for Medicare Part B• Supplemental insuranceSupplemental insurance• Medical expenses Medical expenses notnot covered by Medicare covered by Medicare• Prescription drugsPrescription drugs• Rehabilitative and/or Long-Term careRehabilitative and/or Long-Term care• Hospice careHospice care• Transportation and lodging expenses incurred in the process of Transportation and lodging expenses incurred in the process of

obtaining medical treatmentobtaining medical treatment• Durable equipment & supplies necessary to regain or maintain Durable equipment & supplies necessary to regain or maintain

physical well-beingphysical well-being

*See IRC Section 213 for full list*See IRC Section 213 for full list

PRM FINANCIAL GROUPSEWP: PLAN FUNDING

• Focusing on funding for post-retirement Focusing on funding for post-retirement benefits addresses two vital issuesbenefits addresses two vital issues

• Creates means of dealing with real future Creates means of dealing with real future expenses whose costs might otherwise be expenses whose costs might otherwise be disastrousdisastrous

• Creates demand for substantial employer Creates demand for substantial employer contributions that are deductible under the Codecontributions that are deductible under the Code

PRM FINANCIAL GROUPSEWP: PLAN FUNDING

• Permanent insurance worksPermanent insurance works because because • One contract can provide the features that serve both pre and One contract can provide the features that serve both pre and

post- retirement benefit needspost- retirement benefit needs

The cost of the contract is divided into two elementsThe cost of the contract is divided into two elements

• The Pre-retirement Death BenefitThe Pre-retirement Death Benefit

• Everything ElseEverything Else• All of which is attributed to post-retirement benefit funding and to All of which is attributed to post-retirement benefit funding and to

calculate post-retirement funding contributionscalculate post-retirement funding contributions

PRM FINANCIAL GROUPSEWP: PLAN FUNDING

• Insurance Companies provide the amount of Insurance Companies provide the amount of annual contribution necessary to reach the target annual contribution necessary to reach the target amount of cash value at the specified timeamount of cash value at the specified time

• Based on level funding over the working lives of Based on level funding over the working lives of the participantsthe participants

PRM FINANCIAL GROUPSEWP: PLAN DESIGN

• Customized plan design is based on company profile, Customized plan design is based on company profile, desired company spending goal, and overall plan desired company spending goal, and overall plan objectivesobjectives

• ERISA compliant plan design options focused on ERISA compliant plan design options focused on satisfying the business owner’s objectives and the satisfying the business owner’s objectives and the corporations needscorporations needs

PRM FINANCIAL GROUPSEWP: CLIENT PROFILE

• Successful Small BusinessesSuccessful Small Businesses• Must be a business entityMust be a business entity• Cannot be a Sole Proprietor Cannot be a Sole Proprietor • The fewer employees, the betterThe fewer employees, the better• Disparity in age between the business owner Disparity in age between the business owner

and other employees is a plusand other employees is a plus• Able to make annual contributions for at least 5 Able to make annual contributions for at least 5

yearsyears

PRM FINANCIAL GROUPSEWP: SUMMARY

• Contributions to fund SEWP approx. 95% Contributions to fund SEWP approx. 95% Deductible Deductible

• Funds disbursed to pay post-retirement medical Funds disbursed to pay post-retirement medical benefits generally non-taxablebenefits generally non-taxable

• Participants are taxed only on current economic Participants are taxed only on current economic benefit value of pre-retirement death benefit benefit value of pre-retirement death benefit (Table 2001)(Table 2001)

• Single Employer Welfare Plan is designed to Single Employer Welfare Plan is designed to accommodate a variety of company profiles accommodate a variety of company profiles

PRM FINANCIAL GROUPOUR GOAL

• We want to be your resource for Pension, Benefits, We want to be your resource for Pension, Benefits, and Tax Planning Solutionsand Tax Planning Solutions

• We will design attractive plans that provide meaningful We will design attractive plans that provide meaningful benefits, meet budgetary restraints and achieve benefits, meet budgetary restraints and achieve management strategic goalsmanagement strategic goals

• Reality-based planning™, plan designs that are Reality-based planning™, plan designs that are optimized for today and endure through tomorrowoptimized for today and endure through tomorrow

PRM FINANCIAL GROUPCONTACT US

Office: 847-386-7150Office: 847-386-7150

My e-mail address: peter@prmfinancial.comMy e-mail address: peter@prmfinancial.com

PRM FINANCIAL GROUPTHANK YOU

Reality-based planning™

Optimized for today

Enduring through tomorrow