Skip to content

Plan Funding Analysis

When creating an asset to effectively offset your plan benefit liability, determining the ideal asset funding source is paramount. Mezrah Consulting carefully and thoughtfully evaluates informal plan funding options including taxable and non-taxable securities.

The Key Analysis Component

The focus of our analysis takes the following into consideration:

  • Asset liquidity
  • Tax costs
  • Ease of Administration
  • Trustee costs
  • Transaction costs
  • Funding structure costs
  • Investment management fees
  • Asset funding or allocation limitations
  • Access to "best in class" institutional managers
  • Ease of financial management (asset/liability reconciliation)
  • Third party financial strength
11062b_0f4115861806481da162e5447f867b05~mv2

The Indifference Curve

This chart illustrates an indifference curve between taxable and nontaxable securities (COLI), highlighting combinations of tax rates and earning rates where an investor is theoretically indifferent to the tax attributes of the funding assets. Combinations of tax rates and earning rates above the curve tend to favor nontaxable securities, while those below the curve tend to favor taxable securities funding.

Indifference Curve 12.24

The Next Step

This chart illustrates an indifference curve between taxable and nontaxable securities (COLI), highlighting combinations of tax rates and earning rates where an investor is theoretically indifferent to the tax attributes of the funding assets. Combinations of tax rates and earning rates above the curve tend to favor nontaxable securities, while those below the curve tend to favor taxable securities funding.

Want to learn more?