Many authorities seem to believe it should not. In a 1997 bulletin reporting on the American Society of Pension Actuaries Conference that year, the AALU reported that the IRS may question the acceptability of the acquisition by a qualified pension plan of a second-to-die contract—presumably on the lives of an employee participant and that person’s spouse. The Bureau of National Affairs (BNA), a private tax reporting service has reported that “Employers considering second-to-die life insurance contracts inside defined benefit or money purchase plans would be well advised to reconsider.”
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Reproduced with permission. Copyright The National Underwriter Co. Division of ALM