RCG News

Retirement Capital Group Comments on Yates vs. Hendon

San Diego, CA March 4, 2004 - The US Supreme Court determined this week that a working business owner is an ERISA plan "participant" entitled to ERISA’s protection against having their retirement plan account seized by bankruptcy creditors. This is important news for business owners seeking protection against personal or business creditors.

William MacDonald, Chairman and CEO of Retirement Capital Group, Inc. (RCG) in San Diego, stated, “Business owners and partners, including professionals such as doctors and lawyers, are interested in protecting their retirement benefits from bankruptcy creditors. The ruling is important for business owners interested in the Insured Security Option Plan (ISOP®), a unique ERISA protected plan available to business owners through RCG.”

The ISOP® is a secure, funded alternative to non-qualified deferred compensation plans that allows business owners and executives to contribute unlimited amounts to an ERISA protected retirement plan. The ISOP® uses a combination of after-tax contributions and a third party loan to maximize retirement income.

Mr. MacDonald continued, “ERISA plans provide the best available security against corporate or personal creditors. However, qualified retirement plan contributions are limited by law, and traditional non-qualified retirement plans lack ERISA’s bankruptcy protection. With the Supreme Court’s recent ruling on Yates vs. Hendon, business owners in all states can implement a secure retirement plan through the ISOP® that will provide meaningful, protected amounts of retirement income.”

Business owners (which can include partners in law firms, doctors in medical practices, and other professional corporations) are covered by ERISA’s anti-alienation provisions if their plan covers one or more employees other than the business owner and his or her spouse. Until the Yates decision, the lower courts were divided on whether owner’s retirement accounts had the same protections as employees’ accounts against bankruptcy creditors.

For more information on the Supreme Court decision in Yates v. Hendon and the ISOP®, please contact RCG.

About Retirement Capital Group

RCG is a San Diego-based compensation and executive benefits consulting firm with a national network of affiliates. Focusing on nonqualified plans for medium and large businesses, RCG helps public and private businesses provide innovative compensation and retirement packages to their executives.

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