Company-sponsored Pension Plans

Farmers provides a variety of products which can be used to fund retirement plans for small and medium-sized businesses.

• FarmersQualified Pension Plan
• FarmersSimplified Employee Pension
• FarmersSIMPLE IRA

FarmersQualified Pension Plan Annuities for your employees

Our qualified pension plans provide increased financial security for employees upon retirement.

Advantages of FarmersQualified Pension Plan Annuities: Increased financial security for employees at retirement
Incentive to attract and retain employees
Contributions are income tax-deductible by employer, not currently taxable to employee.
Pension plan earnings are income tax-deferred.

Eligibility

Farmers Annuities can fund a Qualified Pension Plan, which is adopted by sole proprietorships, partnerships, or corporations. Employees having attained age 21 and having one year of service (1,000 hours in a 12-month period) for the employer must be covered. Those plans that provide that employees' benefits are non-forfeitable after no more than two years of service may also require employees to reach age 21 and complete two years service, whichever is later, in order to be covered. More liberal provisions can be adopted if exercised uniformly and in a nondiscriminatory manner.

Employees covered under a collective bargaining agreement retirement plan and certain non-resident aliens may be excluded. Special note: Farmers does not determine eligibility.

Contributions

Contributions are based on a uniform percentage of each participating employee's compensation. This percentage should remain fixed from year to year. Compensation in excess of $200,000 may not be taken into consideration. This $200,000 limit will be adjusted annually by the Secretary of the Treasury to reflect cost-of-living increases.

Contributions are limited to $30,000 or 25 percent of annual compensation, whichever is less.

Issued by Farmers New World Life Insurance Company 3003 77th Ave. S.E., Mercer Island, WA 98040-2890. Products and features are not available in all states and may vary by state.

Form# FNWL020011

FarmersSimplified Employee Pension Annuities

A simplified method for sole proprietorships, partnerships or corporations to contribute toward employee retirement.

Advantages of FarmersSimplified Employee Pension Annuities

• Flexible The pension plan works for sole proprietorships, partnerships or corporations.
• Simple The employer contributes directly to a Farmers Traditional IRA established for

each participating employee.

• Less expensive to establish and maintain than Keogh or corporate pension plans

because of simplified administration.

• Tax deductible Employer contributions are fully deductible for the employer's for Federal

income tax purposes.

Eligibility and participation

Employees at least age 21 who have worked for the employer any part of three of the immediately preceding five years must be covered. This can include self-employed individuals. Employees covered under a collective bargaining agreement retirement plan, employees receiving less than $400 of annual compensation from the employer and certain non-resident aliens may be excluded. See a tax advisor for information relevant to your situation.

Contributions

Contributions are calculated on a uniform percentage of each employee's annual compensation. (Compensation in excess of $200,000 may not be taken into consideration.) The percentage may be varied from year to year. Contributions need not be made in any given year and are limited to $40,000 or 25 percent of each employee's annual compensation, whichever is less.

This is not intended as legal or tax advice. It is not a complete analysis of Federal laws pertaining to qualified plans. Further information on qualified plans can be found in IRS publications or by consulting your tax advisor.

For further information on the use of annuities for Simplified Employee Pension Plans (SEPs), contact me.


Issued by Farmers New World Life Insurance Company, 3003 77th Ave. S.E., Mercer Island, WA 98040-2890. Products and features are not available in all states and may vary from state to state.

Form# FNWL020019


The FarmersSIMPLE IRA

No two businesses are alike. At Farmers, our team works with yours to also provide quality products and services for your business.

A savings incentive match plan for employees (SIMPLE IRA) is a retirement plan for small businesses having no more than 100 employees. It allows elective income tax-deductible contributions by employees matched by the employer. The contributions must meet certain vesting, participation and administrative requirements in order to receive favorable tax treatment.

Advantages of the SIMPLE IRA

• Contributions by employees and employer are income tax deductible.
• Each employee may contribute up to $10,000 for 2005. This $10,000 figure is subject to

adjustment after 2005 for cost of living increases. Participants who are age 50 or over by
the end of the calendar year can make catch-up contributions.

• Employer has until due date for filing business tax return to make matching and non-

elective contributions.

• Allows employer a cost-effective way to offer a retirement plan to employees.
• Employees are not taxed on salary they have deferred.
• Plan earnings are income tax-deferred.

For further information regarding the use of annuities for SIMPLE IRAs, contact me today. This is not intended as a complete analysis of federal laws pertaining to qualified plans, nor is it intended to be used as tax advice. Further information on qualified plans can be found in IRS publications or by consulting your tax advisor.

Products and features are not available in all states and may vary by state.

Issued by Farmers New World Life Insurance Company
3003 77th Ave., S.E., Mercer Island, WA 98040-2890.

Form# FNWL020020

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