Why Current Market Conditions Are Driving Companies to Hedge their Deferred Compensation Plans

Market volatility and equity losses in recent weeks have been unprecedented. As a result, many companies that had previously left their nonqualified deferred compensation plans unhedged are now moving to hedge these plans.

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The Problem With COLI in a Down Market

From January 1st through March 18th 2020, the S&P 500 index declined by about 25%. This will cause material issues for many companies that are hedging their deferred compensation plans with Corporate-Owned Life Insurance.

CFO Magazine: "There’s a lot to like about total return swaps"

CFO Magazine reports on recent research at Columbia Business School by Atlas’s Ben Eisler. The research analyzes the relative benefits of different options for hedging nonqualified deferred compensation plans.

Atlas, General Mills Selected to Speak at Annual AFP Conference

Atlas and General Mills were recently selected by a panel of senior treasury professionals to present at the annual AFP conference in Boston this year. The session, “Breakfast of Champions: Managing Executive Benefit Costs, Risks with Innovative Hedging,” covered hedging nonqualified deferred compensation plans with Total Return Swaps.

 
OUR STORY

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WHAT WE DO
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The nonqualified plan marketplace has seen significant change in recent years. These changes have materially impacted plans across the Fortune 1000, prompting companies to adapt, improve outcomes for plan participants, and mitigate a negative impact to corporate earnings.
Atlas Benefit Finance, established two decades ago, supports companies in managing these trends and their plans more broadly. Our proprietary tools and extensive knowledge from working with the world’s largest companies (our clients) enable companies to most effectively manage the costs and risks of these plans.

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The overwhelming majority of stable value wraps for BOLI and COLI products provide low returns for the risk, and do not allow policyowners to manage the credit or duration risks of their portfolios. They have other poor terms and high fees, leaving portfolio managers at significant risk of long-term underperformance.

Atlas SV Partners designs, provides, and administers stable value wraps that provide policyowners with the ability to manage the credit and duration risks of their portfolios, earn higher returns, and with superior features (e.g. no change of tax law, long-term crawl-out, or surrender-all provisions). Our team has developed and administered several SV businesses over the past 20 years that together have generated $50 billion in AUM.

JurisPrudent Deferral Solutions offers law firms the market’s most advanced attorney fee deferral program. Leveraging our extensive experience with nonqualified deferred compensation plans and our knowledge of the features large corporations require, our attorney fee deferral plan is structured to offer unmatched safety, superior service, and complete transparency.
JurisPrudent’s fee deferral program enables successful attorneys to manage their tax burdens and cash flow requirements most effectively and securely.

 
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NQDC INSIGHTS

A quarterly email from Atlas about the latest significant trends in the executive benefits marketplace.

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