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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

Content is the opinion of the author and does not represent the position of any other person or entity. Information is from sources believed to be reliable but cannot be guaranteed.

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Pension questions from a broker

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: I have a client that may benefit from consideration of a 412(i) plan. Is your primary function to provide a boilerplate or turnkey type document based on the clients' needs and situation? If that is so, can I still serve as the agent of record for the actual guaranteed investment? Further, if the previous questions are answered affirmatively, what is the procedure for initiating a case with you? How long does the IRS approval process take?

A: Yes, any investment or insurance may be used in a Freedom Benefits pension plan and any representative may be the agent of record. A 412(i) plan refers to a specific type of pension plan that is funded exclusively with life insurance and annuities so this type of plan is of more interest to insurance brokers. But you should be aware that Freedom Benefits publications generally advocate the use of no-load investments and provide other advice that may be in conflict with your financial interests with your client. In fact, one of the published articles discusses the pension performance of Vanguard and Ameritas no-load annuities vs. popular commissioned annuity products. This causes most brokers to shy away from using Freedom Benefits Association as a pension service provider. A 412(i) plan can be started most easily by submitting an online order form at . Place a notation "412(i) in the comments box. The cost is $150; setup time is one business day; no IRS approval is required.


More resources:

Freedom Benefits Association