What is an IRS Code Section 412(i) Defined Benefit Pension Plan?
A 412(i) Plan is a defined benefit plan funded with guaranteed life insurance and/or annuity contracts. It is a custom-designed plan that can be used with any investment grade life insurance or annuity contract. A 412(i) plan is the only defined benefit plan that is exempt from the minimum funding requirements of Section 412 of the Internal Revenue Code. The plan is governed by the Employee Retirement and Income Security Act of 1974 (“ERISA”), the federal act governing the funding, vesting, administration and termination of private pension plans. These are also known as an insurance contract plan or a Fully Insured Defined Benefit Plan.
