Funding Vehicles

Fully insured pension plans must be funded by certain insurance contracts. At Ohio National, we offer the following options:

• Prime II Annuity; and
• Prestige XCEL Whole Life.

There are two practical tests developed by the IRS to consider whether or not a death benefit is "incidental".

• The first is the 100-to-One Test. The participant's insured death benefit must be no more than 100 times the expected monthly retirement benefit.
• The second test is referred to as the percentage-of-benefits test. This test states that, if the life insurance premium portion does not exceed 50 percent of the employer contribution, the resulting death benefit is incidental to the plan.

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