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Wealth Control Advisors, LLC
Rosenheim Financial Services
60 William Street, Suite 200
Wellesley, MA 02481
781-235-8891 MA telephone
781-235-8890 private fax
866-235-8891 outside Mass.
10781 Waterford Place
West Palm Beach, FL 33412
561-691-1380 FL telephone
info@wealthcontrol.com
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Case Study 7: Midsized Company Benefits Bonus Program
One of our midsized company clients is a closely held family owned firm of about 500 employees. It had what the owners thought was a very generous package of employee benefits, including health, life, disability, dental, and a comprehensive 401k. Until recently, they had never lost a key employee to competitors.
After a nasty divorce, a key employee needed to spend added money to buy insurance to guarantee their ex spouse ongoing alimony payments, fund their divorce depleted retirement plan, fully fund their children’s education, and protect their own income. Under the company’s existing benefit structure there were no solutions to divorcing employee’s financial dilemma thru any voluntary benefits or company sponsored and endorsed opportunities. The employee was able to find the required solutions at another firm, and with regret, left the firm where they had been employed for many years. Because of that employee changing firms, the owners realized that their company’s benefit offerings required restructuring.
The firm’s owners hired us to design a new executive and managers incentive plan that would be funded out of the bonus pool of money that the firm would pay out yearly, assuming the employee and the firm hit specified financial targets. A goal of the new plan was the stipulation that 20% of the any bonus paid would be allocated to product and planning solutions that would help their key management employees protect their own future financial independence.
The result was a package of benefit opportunities where each employee could:
- Voluntarily increase their personal disability or life insurance with a permanent discount
- Purchase discounted long term health care protection
- Engage our firm to design and implement a financial plan, via our Personal Financial Planning For Senior Executives
- Allocate bonus money to their children’s education funding, tax deferred annuities, or mutual funds to help with their own retirement
- Use some of those bonus dollars to pay for personal protection that the employees previously owned and paid for personally
By mandating 20% of the bonus be allocated to protection and financial planning efforts, the firm’s owners were helping prevent future financial dilemmas or disasters that their employees might face in the future.
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