Employee benefits: (See comments below.)

Do current plans include:

Group benefits	[X]	[  ]
Qualified retirement plans	[  ]	[X]
Voluntary payroll deduction plans	[  ]	[X]

Comments:

1. Franklin Electronics, Inc. has had the same group insurance plan for the past five years. The principals and employees are satisfied with the benefits, price and service provided by their group carrier. Current benefits include:
   • Major medical
   
   
   • Group dental
   
   
   • Group short-term disability
   
   
   • Group long-term disability
   
   
   • Group life (one times salary)
2. Because of the high costs and reporting requirements, Franklin Electronics discontinued its defined contribution pension plan five years ago.

Business objectives: During the initial meeting, the principals expressed interest in the following.

• The company paid $105,000 in federal and state taxes last year. The principals want to reduce the company's tax exposure in the future.
• The principals believe that their buy-sell agreement funded with term insurance will enable them effectively to implement their buy-sell agreement.
• The principals believe that the loss of their key employee, Simon Green, would substantially affect the financial success of the business.
• The principals are interested in using business dollars to pay for personal life insurance.
• Retirement planning is a high priority for the principals, as well as for the other employees. However, the principals want to avoid the cost and administrative and reporting requirements of qualified retirement plans.

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