Balser has helped hundreds of companies decide how to fund benefit plans, including nonqualified benefits like deferred compensation and SERPs, or insurance plans for life, disability and long term care. Companies have different philosophies about paying for employee benefits, and Balser has experience working with these different environments. It's not expected that every company shares the same views on costs, cost recovery, or offers the richer secure benefits or tolerates the same exposure to risks. However, it is important that chief officers and senior managers adequately understand their company's benefits program within the corporate benefits landscape, and the opportunities available to address costs, risks, and well-being.

Although Balser is recognized as a leading broker in corporate owned life insurance (COLI) and has been involved in cost recovery insurance strategies for decades, it's important to note that nearly half the nonqualified deferred compensation plans we administer are not funded by COLI placed by Balser Companies, and more than a dozen have not created a COLI funding strategy. Some plans are partially funded with COLI, others use taxable investments to create a reserved asset to pay current and future benefit obligations. We also service deferral plans that are self-funded or unfunded.

To properly construct this informal funding, Balser analyzes key factors and determines the best solutions, including vehicles that use corporate-owned life insurance (COLI), mutual funds and alternative investments. The funding vehicle will add security to the promise by management that the company will in fact have the resources for participants' retirement income payments when they come due.

Balser Companies and the client collaborate to determine the appropriate funding vehicle or vehicles. This can be discussed in tandem with the design of a new deferral plan, or once a liability exists. Certain choices about employee eligibility, eligible compensation, valuation, distribution options, and other features (like additional death benefits) influence the structure of the asset created for future payment obligations.

Given its advantages (cost recovery / tax and accounting treatment), COLI became the most common method of funding nonqualified benefits over the past two decades with 83% of those that fund this type of benefit choosing COLI. Although COLI became the most common method of funding nonqualified benefits over the past two decades and Balser is recognized as a COLI expert, corporate-owned life insurance is not necessarily the best solution for every situation, and may be only part of a solution.