INTEGRITY ADVISORSPENSION CONSULTANTS

Specialists in Wealthfor Over 60 Years

Build it

Protect it

Diversify it

Shelter it

Insure it

Pass it on

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Establish fundamental financial building blocks

Establish a business 401(k) profit-sharing plan

Integrity Advisors financial professionals are not permitted to provide services that would qualify them as an ERISA fiduciary for a qualified plan.

Collectively for six decades Integrity Advisors Pension Consultants, Inc. has been providing comprehensive financial services for people with a talent for building businesses – people who succeed by identifying market needs and meeting them with the right product or service. In much the same way, we help our clients navigate through the myriad options of contemporary wealth management and identify the tools needed to build upon their wealth. It’s a proven program for upgrading your financial status this year, next year and through every phase of life.

WITH THAT BEING SAID…Integrity Advisors’ unique ability is focused on the advocating of Qualified Plan opportunities to the closely held business and individual communities. By using our professional relationships with actuarial design firms, Integrity Advisors facilitates and expedites the flow of information, and translates actuarial language (concepts, formulas, designs) to the client/advisor in a more understandable manner. This enables the client/advisor to take advantage of opportunities to maximize retirement income while reducing income tax liability. This is accomplished through the legislative enhancements in section 400 of the Internal Revenue Code Qualified Retirement Plan Design.

We at Integrity Advisors are privileged to have been part of this forgotten niche in Qualified Plan Design thanks to the efforts of our grandfather, father and founder, Salvatore Gaglio, to bridge the intergenerational changes in tax legislation. Our key strength from his generation to ours and for many more years to come will remain the same: ”STAYING CURRENT ON CHANGES IN THE FEDERAL TAX LAW THAT IMPACT THE BUSINESS COMMUNITY.”

Integrity Advisors: WHAT WE DO. HOW WE DO IT. WHY WE DO IT.

Tax Planning Strategies

Retirement and Pension Planning> Qualified and Non-qualified Plan Design and

Implementation

Business Succession Planning

Employee and Executive Benefits

Investment and Asset Allocation

Executive Compensation

Estate and Distribution Planning

Indemnification Planning> Life and Disability Insurance Strategies

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Draft a will Set up a business succession plan

We are a team of highly trained specialists devoted to building long-term business relationships driven by adding value and earning trust. Our extensive network of professional relationships (actuaries, accountants and attorneys) provides our clients with the broadest possible range of experience and advice.

WHO WE ARE. Salvatore GaglioFounder & Chairman Emeritus

Matthew GaglioRegistered Representative,President/CEO

Johanna Gaglio-BogenRegistered Representative,Vice President of Operations

Jacob GaglioField Representative

Joseph M. GaglioField Representative

Evaluate tax shelter in a defined benefit planIdentify key executives and retention strategies

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The American Taxpayer Relief Act of 2012 (ATRA)ATRA is a US law effective for tax years beginning in 2013. ATRA permanently extended many of the Bush-era tax cuts that were enacted in the Economic Growth and Tax Relief Reconciliation Act (EGTRRA 2001); however, ATRA imposes higher income tax rates on certain high-income taxpayers. ATRA also made permanent extensions to the gift, estate and generation-skipping transfer tax exemption amounts ($5 million, indexed for inflation annually). The pension provisions of EGTRRA including increased IRA and 401(k) deferral limits, the higher contribution and benefit limitations for qualified plans, the higher compensation limit, catch-up contributions, Roth 401(k) provision, etc. which were scheduled to expire in 2010 were permanently extended by the Pension Protection Act of 2006 (PPA).

Profit Sharing PlansProfit Sharing Plans are flexible and therefore best suited to new businesses or firms whose income fluctuates from year to year. A Profit Sharing Plan is a Defined Contribution (DC) Plan in which contributions each year are discretionary and cannot exceed 25% of the sum of all eligible participants’ salaries. It is an individual account plan, thus, the ultimate retirement benefit/amount is the actual account value that has been credited with contributions and investment experience through the years. There are various types of Profit Sharing Plans. Each type is dependent on the contribution allocation method and plan features. An Age-based Profit Sharing Plan is one that uses both age and compensation as a basis for allocating employer contributions among plan participants. This concept is similar to Target Benefit Plans. With a Profit Sharing Plan, contributions are not mandatory. Age-based Profit Sharing Plans, like Target Benefit Plans, tend to favor older, higher-paid individuals.

An Integrated Profit Sharing Plan is a type of allocation method that is integrated with an overall retirement scheme and includes Social Security. This combination is called “permitted disparity.” By providing for permitted disparity in its qualified retirement plan, the employer gets the benefit of Social Security tax payments.

Under an Integrated Profit Sharing Plan, compensation is broken out into two parts: the amount above the integration level (excess compensation) and the amount below the integration level (base compensation). Usually the integration level is the Social Security Taxable Wage Base in effect for the applicable year. The employer is permitted to “offset” their contribution to Social Security by applying a lower contribution percentage to the base compensation (i.e., the base percentage) and a higher contribution percentage to the excess compensation (i.e., the excess percentage). There is a limit or “permitted disparity,” however, between the base percentage and the excess percentage. The permitted disparity depends upon the contribution level to the plan. Generally, this type of allocation formula tends to favor higher-paid employees.

In a new Comparability Plan, the employer segregates the eligible employees into “non-discriminatory” categories (i.e., job description, title, hourly vs. salaried, etc.) and designates different contribution rates for each group.

Because of the potential for discrimination in favor of “highly compensated employees” this type of plan is required to perform special tests each year to ensure that the contributions do not violate the IRC Sec. 401(a)(4) non-discrimination rules. If the plan does not pass these tests, the contribution rates for some/all groups must be adjusted. Also, beginning with the 2002 plan year, each NHCE (non-highly compensated employee) cannot receive a contribution that is less than the lower of 5% of salary or one-third of the highest allocation rate for a highly compensated employee regardless of the results of the non-discrimination tests. Though this type of plan normally favors highly compensated employees, it can be designed to favor any group of employees assuming the annual “non-discrimination” requirements are satisfied.

In a 401(k) Plan, participants are able to defer a portion (up to the annual government limit) of their salary into the plan. The funds that are deferred are not included in current income until they are withdrawn from the plan. Amounts deferred into the plan generally may not be distributed without penalty until the employee retires, becomes disabled, dies, or reaches age 59½.

In addition to employee deferrals, the plan may also provide for an employer contribution. This contribution may be in the form of a Matching Contribution or a Discretionary Contribution. Discretionary Contributions may be allocated either as a level percentage of pay for all, or by one of the methods listed.

Defined Benefit PlansDefined Benefit Plans allow employers to assure employees of their retirement income by defining the benefit at retirement age. The amounts that participants will receive at retirement are determined (or defined) upon becoming a participant in the plan, and are not based on future investment returns. To fulfill the benefit (or promise to pay at retirement), these plans require annual contributions determined by an actuary. Defined Benefit Plans offer business owners the greatest potential for tax benefits by maximizing contributions to a plan.

Defined Benefit Plans allow employers to fund much larger contributions than 401(k) plans or defined contribution plans. The higher the employer contributions, the larger the tax deduction for contributions the employers receive.

Contributions to Defined Benefit Plans are not discretionary, and they are calculated each year by an actuary based on changing factors such as interest rates, current plan assets, and projected benefits.

As with any investment, employers bear risk. If the trust experiences an investment loss for a particular year, the employer may be required to fund larger contributions so that the plan is adequately funded. Secondly, because the benefits that participants receive are defined by the plan document, contributions may still be required during a plan year in which the employer does not make a profit. Lastly, there are several actuarial factors that affect the annual funding amount. These factors are not always predictable and can cause required contributions to fluctuate each year.

Integrity Advisors: SMART PLANNING OPTIONS

Review will and overall asset inventory/create trusts

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Take advantage of any necessary “catch-up” contributions to a 401(k) and/or IRA

Evaluate family business and its wealth effect

Non-qualified PlansA deferred compensation plan is an arrangement in which an employee or owner defers some portion of their current income until a specified future date. Wages earned in one period are actually paid at a later date. Life insurance can be used to informally fund a deferred compensation plan. The deferred amounts can be used to pay premiums on cash value life insurance. The cash value can then be available at retirement to supplement other income or, if the insured dies before retirement, the insured’s designated beneficiary would receive the insurance policy’s death benefit.

A non-qualified deferred compensation plan gives the employer the power to pick and choose among the recipient employees without regard to years of service, salary level or any other criteria. It also allows a business to provide benefits to officers, executives and other highly paid employees as part of an executive benefits package. With a non-qualified plan the amounts of the employer’s contributions are not limited. There are no significant filing or reporting requirements.

A non-qualified plan does not, however, receive favorable tax treatment at the time it is given. The employer is not entitled to tax deductions until the benefits are actually paid to the employee.

Executive BenefitsTo help you attract and retain top performers, there are attractive executive benefits you can offer.

An executive bonus plan is a way for the employer to “bonus” the employee with an amount of money to be used as funding for a life insurance policy. The employee only pays income tax on the bonus applied as premium. In future years, the employee can draw on the cash value of this policy through loans or withdrawals, and in the event of death, the employee’s family receives the death benefit.

Business SuccessionJust as you would help plan your client’s future, you should plan for the future of your company. By putting the proper strategies in place now, you can ensure your company will continue on according to your wishes.

Key person insurance, often referred to as “key man” insurance, is life insurance on the “key” person in a business. This is usually the owner, the founder or a key employee. The purpose of key man insurance is to help the company survive the blow of losing the person(s) who makes the business work.

To secure key man insurance, a company purchases a life insurance policy on the key employee, pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner. A Family Limited Partnership (FLP) refers to a limited partnership formed to hold the family business or investments, assuming the parents will make gifts of their limited partnership interests to their children. Because the limited partnership interests are illiquid, they would be subject to substantial discounts for federal gift and estate tax planning purposes. When utilized correctly, FLPs can be very powerful estate planning and asset protection planning tools.

Gifts of corporate stock are often the most effective way to reduce estate taxation. Gifts can be made outright or in trust. The basic benefits of gifting include shifting the income and growth of an asset out of a higher income tax bracket.

The Buy-Sell AgreementThe buy-sell agreement provides assurance to surviving owners that their business will continue in a successful manner. It also provides the deceased owner’s heirs with funds that will enable them to meet their financial needs and pay estate administration costs. It is an agreement between the owners of a business detailing what is to occur upon the death of one of the owners. Such agreements can also deal with the situation in which one of the owners becomes disabled, retires, divorces, or wishes to sell his or her interest in the business.

Typically, the buy-sell agreement provides that the surviving owner of the business will purchase the deceased or withdrawing owner’s share of the operation. The agreement should set forth the purchase price to be paid, or should provide a formula for determining the price. Most importantly, the agreement must have a mechanism for providing the funds needed to make the purchase. To meet this need, a life insurance policy is often used which pays a death benefit upon the death of the business owner, thereby ensuring that funds are available for the buyout, regardless of which partner dies first.

Stock redemption is a type of buy-sell agreement that occurs when a company buys back stock from the shareholder or a deceased shareholder's estate. Typically, the estate receives cash in exchange for the stock.

Integrity Advisors: PROTECTING YOUR ASSETS

Investments:As an Integrity Advisors client, you will be guided toward the most strategically sound tools for building, protecting and transferring your wealth. This includes understanding and knowing your client profile and the suitability of appropriate investments, including the proper asset allocation to achieve your goals. Ongoing monitoring and updating are essential as your investment needs change. Our responsibility is to provide you with information that you’ll use to evaluate your investment portfolio accordingly.

Suitability:Suitability is the appropriateness of an investment recommendation for an individual investor. Suitability considers your risk tolerance, other security holdings, financial situation (income and net worth), financial needs, and investment objectives.

Asset Allocation:Asset allocation is the process of dividing your investment portfolio among asset categories such as stocks, bonds, real estate and cash. How you decide to combine the assets in your portfolio is a very personal choice that depends chiefly on your goals, experience and risk profile.

Creative and Enhanced Money Management:Integrity Advisors explains the differences in the ever-changing investment marketplace of the past, present and future, making sure your investments reflect the market of today and not yesterday. We strive to manage your money with your objectives in mind. Our goal is to provide our clients with a diversified approach in strategy, not only in investments. Investments must fit your financial profile, complement one another, and should not overlap or become redundant.

Integrity Advisors: HELPING TO INCREASE YOUR NET WORTH

Review and update estate protection strategies

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Review insurance policies before possible loss of insurability

Consider estate conservation strategies by way of gifting, long-term care, and the reallocation of wealth

Estate planning is a process that involves family, trusted advisors and, in many cases, charitable organizations of your choice. It also involves your assets and all the various forms of ownership and title that those assets take. Estate planning can even play an important role in your welfare and needs, by helping to plan for your health care if you are no longer able to care for yourself.

Estate planning helps to clarify how your assets will be managed for your benefit if you are unable to do so. It also determines when certain assets will be transferred to others, either during your lifetime, at your death, or some time after your death, and to whom those assets will pass. There are various tools used in estate planning including the will, various types of trusts, beneficiary designations, powers of appointment, various forms of property ownership gifting, and powers of attorney.

Wills:A will is the cornerstone of the estate planning process. It allows you to provide written instructions outlining how you’d like your property to be distributed after your death. It also allows you to name a guardian for your minor children.

Trusts:Trusts permit money or property to be owned and managed by a person or entity for the benefit of another. Trusts frequently appear in wills. Trusts provide for the protection of assets for the benefit of the beneficiaries and can be positioned outside of the owner’s taxable estate.

Distribution Planning:Stretch IRAOnce distributions from an IRA begin, the funds are intended to be distributed to the owner over his or her lifetime. That date can be extended by naming a successor beneficiary to the original beneficiary via a Stretch IRA.

Required Minimum Distributions (RMDs)A Required Minimum Distribution is the minimum amount the IRS requires you to withdraw from your retirement accounts annually beginning in the year you turn 70½.

Strategies:Life InsuranceLife insurance pays a specified sum of money to a designated beneficiary upon the death of the insured. Life insurance products include both term and permanent forms of insurance. Integrity Advisors can show you which product is most appropriate for your situation.

Succession Planning Succession planning ensures that the business continues upon the death or permanent disability of the owner. Integrity Advisors works with its clients to develop and implement effective succession strategies.

Estate Planning:Experience tells us there is nothing more critical than planning for the future, safeguarding assets and making sure loved ones are cared for in time of need. We can help you sort through your many estate planning options and chart a secure path for your finances.

Integrity Advisors: MINIMIZING ESTATE TAX

Consider charitable contributions and planning

Intergenerational and distribution planning

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Consider estate conservation strategies by way of gifting, long-term care, and the reallocation of wealth

2015-11415 Exp 10/17

INTEGRITY ADVISORSPENSION CONSULTANTS, INC.800 Westchester Avenue, 4th Floor, Suite N409Rye Brook, NY 10573Phone: 914.288.8858Fax: 914.705.8138www.integrityadvisor.com

INTEGRITY ADVISORSPENSION CONSULTANTS, INC.120 Broadway, 37th FloorNew York, NY 10271www.integrityadvisor.com

Registered representatives and financial advisors of Park Avenue Securities, LLC (PAS). Securities products/services and advisory services offered through PAS, 1-914-288-8800, a registered broker-dealer and investment advisor. Field representatives, the Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect wholly owned subsidiary of Guardian. Integrity Advisors Pension Consultants, Inc. is not an affiliate or subsidiary of PAS or Guardian. Guardian, its subsidiaries, agents or employees do not give tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.

PAS is a member FINRA, SIPC.

©2015 Integrity Advisors Pension Consultants, Inc.