A Whole New Way of Thinking about - Funding Government Benefits
ABILTM for Governments
A critical issue facing state and local governments is their ability to address their under funded pension and OPEB (Other Post Employment Benefits) liability. The question asked by all is “where does all the money come from?” While many firms have advised governments to establish a trust and contribute the Annual Required Contribution (ARC), these firms have not been able to advise governmental clients on how to get the money to fund the trust. The ABIL PlanTM is the only pension and GASB 45 funding solution that does NOT require raising taxes, issuing bonds, or shifting money from other governmental services. Utilizing ABILTM, governments can take advantage of the power of leverage to fully fund their existing pension and OPEB liabilities with no out of pocket money from the governmental entity.
Special Section 115 Trust
Under ABILTM, a Section 115 Trust is established for the purpose of purchasing life insurance on the lives of some or all active employees (with employee consent). The policies are purchased with borrowed funds and secured by the insurance policies themselves. ABILTM is capable of fully funding an employer’s OPEB or Pension liability because the increase in value of the insurance policies outpaces the interest charges on the borrowed funds.
The ABIL PlanTM uses a strategy that has been employed for decades by corporations and wealthy families
Relationships Make the Difference
ABILTM works because economies of scale have allowed us to work directly with the world’s largest insurance companies to create specific insurance products, which are designed for rapid and sustained cash growth. This, coupled with special financing arrangements and the credit worthiness of state and local governments, allow for the securing of aggressively priced loans. The result is a leveraged funding solution that really works.
"We all want progress, but if you're on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive."
C. S. Lewis
