What Is a Fully Insured Defined Benefit Plan Highly compensated professionals need to explore the benefits of a variety of tax-advantaged retirement vehicles. Fully insured defined benefit plans are company-sponsored plans, also referred to as “guaranteed plans” or “412(i) plans,” and are generally funded with annuity and/or insurance contracts. These plans guarantee retirement benefits based on a participant’s compensation and years of service. They also typically offer the option for a participant to receive either monthly benefit payments for life or a single lump sum.Under Section 412(i) of the Internal Revenue Code (IRC), they are exempt from minimum funding rules and full funding limitations, which benefits certain owners of a practice looking to maximize their contributions. Participation offers two key benefits for owners—they effectively can lower their taxable income, while at the same time increase their tax deductions.STBP412-ASCopyright © 2014 Liberty Publishing, Inc. All Rights Reserved.