Fillable Printable A Business Proposal Letter
Fillable Printable A Business Proposal Letter
A Business Proposal Letter
Sample: Proposal Letter and Specifications
September 29, 2
Mr. John Consultant
XYZ Co p ora tio
12 3 Mai S tre et
Any whe e, IL 99999
RE : Ret ement Plan for the E mployee s of X YZ Cor poration
N on Participa ting Single Premium Group Annuity Quo ta tion
De ar M r
In respo se to your rece nt re que st for a prop osal, we w ill be providing a pr eliminary non-participating single
0x x
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ir
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. Consultant:
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remium quotation for your client b y 9:00 a.m. PST on Thursday, September 25, 20xx and a final quo tat ion on
Tuesday eptember 30, 20xx.
Our gross single pr e mium quotation w ill be based o n the specifications a nd plan provisions outlined in the
attachm ts .
If our bi is ac ce pte d, a ny c hanges to the pr e mium due to re visions in a nnuitant data or cha nge s in plan
, S
en
d
p
rovisio s initia ted by the c lient will be based on the same a ssumptio ns u sed in the or iginal pric ing, w ith the
exc eptio of the underlying mar ket inte re st ra te . T he r ate used in dete rmining the net dif ferenc e in pr e mium
will be a im partially determined r a te e qua l to the ori ginal pricing intere st r a te , adjuste d by the c hange in the
yiel d to maturity of the 10-year U.S. Treasury Bond from the dat e of purchase to the date on which revised
ca lc ulations a re complete d. I n summ a ry, the or iginal interest ra te is guara ntee d only f or the original pr e mium
agreed t and any addition al pre mium subsequent to the sale w ill be subject to the cur re nt market rate .
If th e to l premium is not pa id in one sing le deposit, the unpa id balance will be charged with interest a t the
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o
ta
p
ric ing r te (the pric ing rate will be tr e ate d as a n annual effe c tive rate of inter e st, and the interest ca lc ulation
will refl t the a ctual numb e r of da ys in the c a lend a r year , i.e . , an ac tual-over-a c tual method), a nd must be
a
ec
p
ai d wit in 31 days of the date of bid acceptance. If your client would like to make other arrangements for h
p
re mium payment, plea se ca ll us to discuss the ir situation.
Financia information on Pacifi c Life may be found o n our website www.PacificLife.com. We will pr ov ide
any othe information necessary up on request.
Sincerel ,
(Name)
Bus ines s Development Anal yst
Re tir e ment Annuities
l
r
y
Pacific Life Insurance Company
700 Newport Center Drive, Newport Beach, California 92660-6397
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
1
PROPOSAL FOR THE RETIREMENT PLAN
FOR EMPLOYEES OF XYZ CORPORATION
Bid Specifications
1. Plan Name
Retirement Plan for the Employees of XYZ
Corporation
a. Qualified Plan?
Yes, Qualified Defined Benefit Plan
b. Sufficient Assets?
Assumed Yes
2. Purpose of Annuity Placement
Plan termination effective August 31,
20xx. All benefit accruals have been frozen
effective December 31, 20xx.
3. Contractholder Name
XYZ Corporation
a. Ongoing entity?
Assumed Yes
b. State of Issue
c. State of Residence
Texas
Assumed Texas
Pacific Life is not authorized to do
business in the state of New York.
Therefore, any covered New York
participants must be "incidental" in
numbers and importance to the total
covered participants. Incidental has been
determined to be less than 10% of total
participants. If there are 10% or more
residing in New York, this quote will be
invalid.
d. Premium Tax
None
OR
Assumed none; premium tax may be
charged later upon receipt of all
Participants states of residence.
For an annuity contract with at least 500
lives, state premium tax is determined by
an allocation method based on the number
of Participants residing in each state, to the
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
2
states in which are located at least 5% of
the total number of Participants, or 50
Participants, whichever is less. We apply
the premium tax rate for each state in
which reside the lesser of 5% or 50
Participants, to the portion of the total
premium attributable to each such state,
based on the ratio of the number of
Participants in each such state to the total
number of Participants in all such states.
4. Commissions
Assumed None or
x.xx% of premium payable to XYZ
Consultant
5. Premium Receipt Date
October 5, 20xx.
6. Pricing Rate
See Annuity Quote Sheet. (This rate also
applies to late payment of premium).
7. Liability Assumption Date
January 1, 20xx.
There will be a refund of premium for any
deaths occurring prior to this date subject
to a premium adjustment for any death
benefits paid by Pacific Life.
8. Benefit Takeover
January 1, 20xx.
a. Data Required by
Complete annuitan t data will be needed
approximately four weeks before the first
of the month in which Pacific Life will
issue direct payments to annuitants in pay
status. Data should be submitted
electronically. Excel spreadsheet is
preferred.
b. Payments Begin
January 1, 20xx. In the event there is a
delay in our receipt of co mplete annuitant
information to enable our timely takeover
of benefit payments, we may request the
client to continue to have all benefit
payments issued by their current trustee or
payor until we are in a position to start
making benefit payments directly to the
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
3
annuitants who are in pay status. Bulk
wire transfers will be made each month to
the client’s trustee or payor to sufficiently
cover all such benefit payments.
c. Withholding
For taxes and medical insurance, if
applicable. For purposes of this proposal,
we have assumed there will be no
withholding for medical insurance for any
annuitant.
d. Tax Reporting
Pacific Life will be responsible for tax
reporting only for those months we
actually issue individual checks to
annuitants in pay status.
9. Toll Free Customer Service
Number
Yes.
10. Proof of Age Requirements
Plan Sponsor Certification.
11. Data Assumptions & Notes
None.
Annuitants in Pay Status
1. Benefit Amount
The monthly amount specified for each
annuitant or beneficiary on the census data,
paid in U.S. dollars.
2. Annuity Form
The form specified on the census data.
3. Payment Due Date
Benefit is payable on the first day of each
month if the annuitant is alive on that day,
subject to the form of annuity in effect.
4. Post-Retirement Death Benefit
None other than what is inherent in the form
of annuity in effect.
5. Cost of Living Adjustment
None.
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
4
Plan Provisions Applicable to Annuitants Not Yet In Pay Status
1. Normal Retirement
a. Eligibility
The first day of the month coinciding with or
next following the attainment of age 65.
Separation of service is required prior to benefit
commencement.
b. Benefit Payable
Monthly benefit as listed in the census data paid
in U.S. dollars.
2. Early Retirement
a. Eligibility
The first day of the month coinciding with or
next following the participant’s attainment of
age 55. Sep a r a t i o n o f se r v i c e i s r e q u i r e d p r i o r t o
benefit commencement.
b. Benefit Payable
The benefit payable is equal to the Participant’s
Normal Retirement Benefit actuarially reduced
from Normal Retirement Date to early
retirement date.
Or
The Normal Retirement is reduced by 5/9
ths
of
1% per month for each of the first sixty (60)
months and 5/18
ths
of 1% per month for each of
the next sixty (60) months by which the Early
Retirement Date precedes the Normal
Retirement Date.
3. Late Retirement
a. Eligibility
Active Participants may elect to defer
commencement of benefit payments to the later of
a) first day of April f ollowing the calendar year in
which Pa rticipan t atta ins ag e 70-1 /2 or b ) actua l
commencement date. Separation of service is
required prior to benefit commencement.
Terminated Vested Participants may not delay
commencement beyond their Normal Retirement
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
5
b. Benefit Payable
Date.
Active Participants will receive an amount equal
to their Normal Retirement Benefit actuarially
increased from Normal Retirement Date to
actual retirement date.
Note: We have assumed that the Benefit
Amount reflected in the data for Active
Participants is as of the Participant’s Normal
Retirement Date without any increase.
For Term inated Ve sted Participants, should a
temporary delay in commencement occur past
Normal Retirement Date, the benefit payable at
delayed commencement date is equal to the
Participant’s Normal Retirement Benefit with
retroactive payments from the Participant’s
Normal Retirement Date to actual commencement
date.
4. Pre-retirement Death Benefit
a. Eligibility
The surviving spouse of a married participant is
eligible for a pre-retirement death benefit; - or
The surviving spouse of a married participant
who was married throughout the one-year period
ending on the participant’s date of death is
eligible for a pre-retirement death benefit.
There is no pre-retirement death benefit payable
on behalf of a single participant.
b. Benefit Payable
A standard qualified pre-retirement survivor
annuity (QPSA) is payable.
If the Participant dies on or after reaching his/her
earliest retirement date, the benefit payable to
the spouse is equal to 50% of that which would
have been payable if the Participant had retired
with a Qualified 50% Joint & Survivor Annuity
(reduced for optional form and early retirement
if applicable) on the day before his/her death.
Benefits are payable the first of the month
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
6
following the Participant’s death.
If the Participant dies before reaching his/her
earliest retirement date, the benefit payable to
the spouse is equal to 50% of that which would
have been payable if the Participant terminated
employment at the earlier of his/her actual
termination of employment or death, survived
until reaching his/her earliest retirement date,
retired on that date with a Qualified 50% Joint &
Survivor Annuity (reduced for optional form and
early retirement if applicable) and died the next
day. Benefits are payable as of the first of the
month following the Participant’s earliest
retirement age.
The spouse may elect to defer commencement of
benefit payments until the Participant’s Normal
Retirement Date.
5. Post-retirement Death Benefit
In accordance with the annuity payment form
in effect.
6. Disability
None provided under this quote.
7. Employee Contributions
None.
8. Cost of Living Adjustment
None.
9. Small Cash-Outs
Accrued benefits with an actuarial equivalent
value of $1,000 or less will be autom atically
paid in a lump sum. Automatic small cash-outs
also apply to the present value of $1,000 or less
of a Pre-Retirement Survivor Annuity that may
be payable to a Participant’s surviving spouse.
If the value exceeds $1,000 but is less than or
equal to $5,000, a Participant may elect a lump
sum of his/her benefit.
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
7
Definitions
1. Actuarial Equivalence
a. Optional Payment Forms
and Late Retirement
The UP84 Mortality Table with one-year set
back, at 7.5% interest.
b. Small Cash-Outs
The mortality table is the GATT basis (currently
prescribed in Revenue Ruling 2007-67 or any
successor Applicable Mortality Table), and the
Applicable Interest Rate is the annual rate based
on the IRC 417(e) as updated and specified by
the Commissioner, for the month of June
immediately preceding the first day of the Plan
Year during which the distribution occurs. The
Plan Year is July 1 to June 30.
2. Normal Form of Payment
a. Single Participants
b. Married Participants
Life Annuity
Actuarial equivalent 50% Joint & Survivor
Annuity. The 50% reduction occurs upon the
death of the participant only.
3. Optional Annuity Forms
The actuarial equivalent of the Life Annuity
normal form.
a. Life Annuity
Provides a monthly annuity for the life of the
Participant.
b. Joint & Survivor Annuity
Provides a monthly annuity for the life of the
Participant. If the Participant predeceases the
joint annuitant, 50%, 66 2/3% or 100% (elected
at time of commencement) of the Participant’s
monthly annuity is continued to the surviving
joint annuitant for his/her lifetime.
If the joint annuitan t is someone other than the
Participant’s spouse, the maximum survivor
annuity, as a percentage of the annuity payable
during the Participant’s lifetime, must comply
with Code Section 401(a)(9) and applicable IRS
regulations.
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
8
Once benefit payments commence, the joint
annuitant designated at time of commencement
can not be changed.
c. Joint and Last Survivor
Annuity
Provides a monthly annuity for the life of the
Participant and the Joint Annuitant. W h en either
the Participant or the Joint Annuitant dies,
payments continue to the survivor in the form of
a life annuity as 66 2/3% percent of the monthly
annuity and is continued to the survivor
annuitant for his/her lifetime.
If the joint annuitan t is someone other than the
Participant’s spouse, the maximum survivor
annuity, as a percentage of the annuity payable
during the Participant’s lifetime, must comply
with Code Section 401(a)(9) and applicable IRS
regulations.
Once benefit payments commence, the joint
annuitant designated at time of commencement
can not be changed.
d. Life Annuity with
Period Certain
Provides a monthly annuity for the life of the
Participant with 5, 10, 15 or 20 (elected at time
of commencement) years of monthly payments
guaranteed. If the Participant should die before
receiving the total guaranteed payments, the
remaining number of guaranteed benefit
payments will continue to the designated
beneficiary.
The guaranteed number of payments shall not
exceed the number of months permitted under
Code Section 401(1) (9) and applicable IRS
regulations.
e. Social Security
Leveling Option
This provides a temporarily increased benefit
until the date the Participant attains age 62 or 65
and a reduced benefit thereafter. The temporary
increase shall be equal to the amount required to
provide approximately the same amount of total
monthly income (taking into account monthly
Social Security benefits) to the Participant
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
Retirement Plan Proposal: XYZ Corporation
Retirement Annuities, Retirement Solutions Division
Pacific Life Insurance Company, 700 Newport Center Drive, Newport Beach, CA 92660, (800) 800-7646
before and after the commencement of Social
Security benefits.
f. 66 2/3% Joint & Survivor
Annuity with 10-Year
Period Certain
This form provides a monthly annuity for the life
of the Participant with 10 years of monthly
payments guaranteed.
If the Participant predeceases the
joint/contingent annuitant before receiving 120
monthly payments, the remaining number of
guaranteed benefit payments will continue to the
joint/contingent annuitant in the same amount
paid to the Participant. Thereafter, 66 2/3% of
the monthly amount will be continued to the
joint/contingent annuitant for his/her lifetime.
If the Participant predeceases the
joint/contingent annuitant after receiving 120
monthly payments, 66 2/3% of the Participant’s
monthly amount will be continued to the
joint/contingent annuitant for his/her lifetime.
If the joint/contingent annuitant predeceases the
Participant before the Participant received 120
payments, the monthly annuity will be continued
to the Participant in the form of a life with
period certain.
The period certain is equal to the months
remaining on the guaranteed period of 120
months.
If the joint/contingent annuitant predeceases the
Participant after the Participant has received 120
monthly payments, the monthly annuity will be
continued to the Particip ant in the form of a life
annuity.
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