1. How do you maintain a strong bottom line? Keep your profits. C: 029193-001

2. Protecting your business and your employees is your number one priority and when it comes to dealing with the problem of disability, you have a number of choices: Hope that it doesn’t happen to you or one of your employees, Wait until a disability actually happens and then decide what to do, or Establish a Qualified Sick Pay Plan that clearly explains the company’s procedures for absences due to injury or illness

3. If you hope it doesn’t happen to you or one of your employees…. You have a one-in-three chance of suffering a long- term disability before retirement if you are between the ages of 25 and 50* It’s not a matter of if it happens, it’s when * 1985 Commissioner’s Disability Table A

4. Waiting until it happens and then handle it….. I won’t offer anything to my employees How will this impact company morale? Have I properly educated my employees so they can address this on their own?

5. I don’t need a formal plan; I’ll just pay my key employees when it happens... Deciding to continue one employee’s salary while disabled establishes a legal practice and sets a precedent for all employees The “wages” paid are not considered a business expense so are not tax-deductible, nor are the FICA taxes tax-deductible Financial Accounting Standard 112– expected payments must be booked as a business liability and the company must reserve for that liability How long can you continue to pay? Who will make the determination of who is actually sick or hurt enough to warrant benefits?

6. Establish a Qualified Sick Pay Plan Helps assure your business contributions will receive favorable tax treatment Gives you, the business owner, control over participants, level of benefits, and cost to the business Funded through disability income insurance, benefits are securely funded and claim determination is handled by the insurance company For 3 or more insured individuals, a premium discount is available

7. What is a Qualified Sick Pay Plan? A legal agreement that sets company policy before a disability occurs It establishes: who to pay how much to pay when to start payments how long to pay who will make the payments

8. What’s required to establish a Qualified Sick Pay Plan? There are 5 basic requirements: 1. It must be in place prior to a disability 2. Its existence should be supported by written evidence 3. It should be communicated to covered employees 4. It must show a commitment to certain rules and regulations governing benefits 5. It must be a plan for employees There is no need to file this agreement with the IRS

9. Fund the Qualified Sick Pay Plan through Massachusetts Mutual Life Insurance Company (MassMutual) For many companies, disability income insurance is the preferred funding vehicle for wage continuation plans

10. Why? The burden of providing income during disability falls on MassMutual through its policy – you don’t have to take it from your business income or build a fund for it

11. And Insuring through MassMutual means the insurance company assumes the responsibility for determining claims – you don’t have to decide what constitutes a disability

12. And that’s not all... It will improve employee morale It helps Strengthens your company’s credit position as it reflects good business management Policy premiums are discounted if 3 or more individuals are insured Flexible funding arrangements to meet your needs– it can be set up as employer-pay-all, employer-pay-part or employee-pay-all Can be offered as an incentive to key employees

13. MassMutual has the solution MassMutual offers two disability income insurance products to fund your Qualified Sick Pay Plan: Radius ®, top-of-the-line protection providing comprehensive coverage FlexElect ®, quality coverage at an affordable cost both are non-cancelable, guaranteed renewable both are offered from MassMutual a Fortune 100 company* that has a long history of exceptional financial strengths * Fortune magazine, April 2004

14. These policies have exclusions and limitations. As a MassMutual representative, I can provide you with complete details and costs. These policies are issued by Massachusetts Mutual Life Insurance Company 1292 State Street, Springfield MA 01111

15. 15 The information contained in this presentation is being provided with the understanding that it is not intended to be interpreted as specific legal or tax advice. Neither MassMutual nor any of its employees or representatives are authorized to give legal or tax advice. Individuals are advised to seek the guidance of their own personal legal or tax counsel.