Retirement Compensation Arrangement (RCA)
Employer interested in
retirement income to
key employees or senior
Willing to fund future
Employer has surplus funds to
invest in RCA.
Employee(s) age 50 or
Willing to seek professional
Employer establishes an RCA. RCA overfunds a life insurance policy. Cash value is accessed to provide promised RCA benefits to employee (taxable).
Show how life insurance can be used as a costeffective funding vehicle for an RCA.
Cash values grow tax deferred (no 50% refundable tax). Contributions to RCA are deductible. No current income inclusion to employee(s). Segregates RCA investment assets from employer. Funded obligation provides peace of mind to mployee(s). Helps retain key employees. Access to cash value through policy withdrawal or collateral loan. Split dollar structures available. May provide tax benefits if moving offshore.