PRM Financial Group Reality-Based Planning ™

1. PRM Financial GroupReality-Based Planning™ PRM Financial Group 2 Northfield Plaza, Suite 255 Northfield, IL 60093 847-386-7692 Fax 847-386-7154 e-mail: peter@prmfinancial.com

2. PRM Financial GroupCompany Overview • Located in Northfield, IL • Network of Actuaries, TPAs, advanced planning experts, marketing, sales, & underwriting assistance • Reality-based planning™ • Dealing with real rather than ideal situations • Provide meaningful employer focused benefits, meet budgetary restraints, and achieve management strategic goals • Optimized for today, enduring through tomorrow

3. PRM Financial GroupCompany Overview • Serve the benefits, retirement, and tax planning needs of individuals, small businesses and professional companies • Partner with CPAs, financial and legal consultants, sales professionals, and other advisors to provide individuals and small business clients with a wide range of planning solutions • Design customized plans that reach the client’s goals while respecting budgetary constraints

4. PRM Financial GroupCompany Services • Health Insurance • Telemedicine • Individual and Small Business Insurance Planning • Multiplan • Highly specialized planning concept • Retirement Plan Comparisons • Analysis of available and appropriate plan options for educated client decisions • Single Employer Welfare Plan (SEWP) • An employer sponsored welfare benefit plan • Designed to fund post retirement medical expenses on a pre-tax basis

5. PRM Financial GroupCompany Services • Education • Qualified Retirement Plans • 419A(c)(2) Single Employer Welfare Plans • Other relevant, unique, owner-focused concepts • Marketing Support • Marketing Pieces • E-mail content and/or campaign management • Contact lists and calling programs • Others as needed

6. PRM Financial GroupCompany Services • Focus for Today… • Single Employer Welfare Plan (SEWP) • An employer sponsored welfare benefit plan • Designed to fund post retirement medical expenses on a pre-tax basis

7. PRM Financial GroupThe Goal • Help you close more business • We are in the game with you…not on the sideline • Be a trusted resource and partner for you • Qualified Retirement Plans • 419A(C)(2) Single Employer Welfare Plans • Other relevant, unique, and owner-focused concepts • Do the dirty work • Gather information and options • Filter through the data • Make the proposals digestible and saleable! • Provide and manage the necessary documents • Underwriting management

8. PRM Financial GroupSingle Employer Welfare Plan (SEWP) • Create • Protect • Preserve A stand alone program or companion to retirement planning

9. PRM Financial GroupSEWP: The Need • People are living longer than ever before • There is a 62% chance that at least one spouse can expect to survive to age 90 • Health care costs continue to rise faster than rate of inflation • It has outpaced inflation for 20 years! • It is widely believed that Medicare is in deep trouble • Deficit nearly twice as large as the Social Security deficit • In 2010, approximately 24% of a retiree’s after-tax income was needed to pay for health care costs • Approx. 29% in 2020 • Approx. 35% in 2030

10. PRM Financial GroupSEWP: The Reason • Longer lives • Advances in medical technology • Leading to better, but more expensive treatments • High administration costs • Fragmented health care delivery and financing system • Existence of many highly paid medical specialists • They are doing amazing things, but it is expensive • Prescription Drugs • The number of drugs (expensive) that represent miracle cures • The number of people who are required to take drug treatments

11. PRM Financial GroupSEWP: A Solution • Post Retirement Medical Planning is a solution • This is the only plan that Penn Mutual allowed after conducting“Third Party Planner” audit • Its up to us to help our clients secure their financial futures! • Most people are unaware of this planning concept • Plan today for the costs of tomorrow • They are inevitable

12. PRM Financial GroupSEWP: Overview • A Welfare benefit plan designed to fund post retirement medical expenses on a pre-tax basis • Supplements Medicare • Allows clients to use their dedicated retirement funds for their retirement rather than for medical expenses • Annual funding contributions accumulate the cash value necessary, at a specific retirement time, to pay for medical expenses for the lifetime of the participant and eligible dependents

13. PRM Financial GroupSEWP: Overview * When taken for allowable medical expenses

14. PRM Financial GroupSEWP: Overview • Contributions are based on actuarial calculations • Spouses and dependants can be included in plan funding • In the event that the participant does not live to retirement or completion of the plan, a death benefit is paid to the beneficiary

15. PRM Financial GroupSEWP: Overview • Internal Revenue Code Section 419A(c)(2) authorizes current funding of post-retirement life and medical benefits • Provided that the benefit reserves • Are actuarially determined • Are levelly funded over the working lives of participating employees

16. PRM Financial GroupSEWP: Overview • Medical benefits* may include, but are not limited to: • Premium payments for Medicare Part B • Supplemental insurance • Medical expenses not covered by Medicare • Prescription drugs • Rehabilitative and/or Long-Term care • Hospice care • Transportation and lodging expenses incurred in the process of obtaining medical treatment • Durable equipment & supplies necessary to regain or maintain physical well-being *See IRC Section 213 for full list

17. PRM Financial GroupSEWP: Plan Funding • Focusing on funding for post-retirement benefits addresses two vital issues • Creates means of dealing with real future expenses whose costs might otherwise be disastrous • Creates demand for substantial employer contributions that are deductible under the Code

18. PRM Financial GroupSEWP: Plan Funding • Permanent insurance worksbecause • One contract can provide the features that serve both pre and post- retirement benefit needs The cost of the contract is divided into two elements • The Pre-retirement Death Benefit • Everything Else • All of which is attributed to post-retirement benefit funding and to calculate post-retirement funding contributions

19. PRM Financial GroupSEWP: Plan Funding • Insurance Companies provide the amount of annual contribution necessary to reach the target amount of cash value at the specified time • Based on level funding over the working lives of the participants

20. PRM Financial GroupSEWP: Plan Design • Customized plan design is based on company profile, desired company spending goal, and overall plan objectives • ERISA compliant plan design options focused on satisfying the business owner’s objectives and the corporations needs

21. PRM Financial GroupSEWP: Client Profile • Successful Small Businesses • Must be a business entity • Cannot be a Sole Proprietor • The fewer employees, the better • Disparity in age between the business owner and other employees is a plus • Able to make annual contributions for at least 5 years

22. PRM Financial GroupSEWP: Summary • Contributions to fund SEWP approx. 95% Deductible • Funds disbursed to pay post-retirement medical benefits generally non-taxable • Participants are taxed only on current economic benefit value of pre-retirement death benefit (Table 2001) • Single Employer Welfare Plan is designed to accommodate a variety of company profiles

23. PRM Financial GroupOur Goal • We want to be your resource for Pension, Benefits, and Tax Planning Solutions • We will design attractive plans that provide meaningful benefits, meet budgetary restraints and achieve management strategic goals • Reality-based planning™, plan designs that are optimized for today and endure through tomorrow

24. PRM Financial GroupContact US Office: 847-386-7150 My e-mail address: peter@prmfinancial.com

25. PRM Financial GroupThank You Reality-based planning™ Optimized for today Enduring through tomorrow