Bridge the retirement gap for your executives and enhance their retirement security
Did you know? Attracting and retaining executives and other key personnel continues to be the number one goal for plan sponsors as they reflect on their non-qualified deferred compensation programs.
76% ranked it as one of their top three goals1
72% viewed non-qualified plans as a valuable retention tool2
Overview
Recruiting, rewarding and retaining key employees is crucial in today’s competitive job market. Recent changes in corporate tax rates and the tax deduction of qualified business income for pass-through entities may make it easier for employers to use tax savings to fund nonqualified benefits for key employees. Supplemental executive retirement plans (SERPs) may be effective tools for recruiting, rewarding and retaining key employees and helping them prepare for retirement. Unlike qualified plans, these plans can be discretionary, enabling the business to select who receives the benefits, when they receive them and how much they receive.
Key highlights
- You can select who participates
- You determine the vesting schedule and when/how benefits are paid
- Often informally funded with life insurance
- Participant pays tax only when payments received
- You can deduct benefits once paid
SERPs are employer-funded, non-qualified plans designed to provide additional retirement income to select key employees. When paired with life insurance, SERPs can offer tax-advantaged funding, death benefit protection, and a valuable incentive to help recruit, reward, and retain top talent while aligning their long-term goals with your company's success.
This material is for informational purposes only. It should not be considered as investment, financial, legal or tax advice. You are encouraged to discuss this concept with your legal, tax and financial advisors.
12024 Newport/PLANSPONSOR NQDC Trends Survey Report, 08/2024
22023 Principal Trends in Nonqualified Deferred Compensation Report, Research Key Findings, 11/2023
