Using the AFS Optimizer to Improve Nonqualified Plan Funding Efficiency

ABC Corporation owned a large block of COLI to informally fund a deferred compensation plan. The funding vehicle had been implemented 10+ years ago,and was not performing as originally expected. Corporate Finance was considering the replacement of the existing COLI with new “state-of-the-art” contracts; but, Human Resources was concerned about the disruption of the participant experience that would be caused by the “consent” process associated with replacement.

Using the AFS “Optimizer Process”, EBS was able to restructure the existing block of COLI resulting in:

  • A significant improvement in asset performance,
  • Avoidance of significant transaction costs associated with a replacement and,
  • In a manner that was totally transparent to participants.

…the COLI was “right-sized” yielding $20+ million in P&L gains over 10 years.