Banks routinely use bank-owned life insurance (BOLI) to fund certain nonqualified deferred compensation plans. However, from an actuarial perspective, there is no one comprehensive solution. This article highlights some of the key actuarial considerations associated with designing, implementing, and managing a portfolio of BOLI policies. The commentary was first published in the Spring 2024 issue of the Benefits Law Journal, with the following sections: 

• Not all employee benefit plans are plain vanilla
• Asset-liability management
• Liquidity through policy loans
• Reinvestment strategy
• Policy loans versus policy surrenders
• Premium payment strategies
• Policy replacements and conversions

Access the previous articles: Part I, Part II