A qualified tax-deductible pension or profit-sharing retirement plan for self-employed individuals and their employees, with contribution units based on net earnings.
Key contributor insurance
Disability, health, and/or life insurance policies designed to protect the company for the loss of the services of essential employees, with premiums paid and benefits received by the company; key man insurance.
The Internal Revenue Code imposes certain additional requirements on plans that discriminate in favor of key employees, who include officers, the 10 employees owning the largest shares of the employer, anyone owning more than 5 percent of the employer, and anyone earning more than $150,000 who also owns more than I percent of the employer.
Key man (or key person) insurance
A type of corporate-owned life insurance purchased by a company to protect itself from financial loss arising from the death or disability of key executives. It can also be used to finance nonqualified retirement benefits for executives.
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