Supplemental Executive Retirement Plan
Business owners should consider a Supplemental Executive Retirement Plan (SERP) as one option in their Selective Employee Benefits Plan. A SERP is a non-qualified deferred compensation agreement between a company and select key employees in which the company agrees to provide a specified benefit amount at retirement, or should the employee die, become disabled or terminate employment.
Benefits of a SERP
For the company:Simple
- No IRS restrictions or approval.
- No government forms or reports.
- No burdensome administration.
Cost-Effective
- You can recover the cost of the plan.
- Enhances financial statements.
- Minimal administration costs.
Selective
- No mandatory eligibility and participation rules.
- You select which key employees participate.
Flexible
- No required plan provisions.
- Custom tailored to each participant.
"Golden Handcuff" Incentives
- Recruit, reward and retain key employees.
For key employees:
Income-Tax Savings
- Reduction of current income taxes.
- Deferral of tax on investment earnings.
Supplemental Income
- Additional income at retirement, disability or termination of employment.
Survivors' Benefits
- Benefits are paid to surviving family members at death
Related Products used to fund SERPs.
Team with a professional to create your SERP
If a Supplemental Employee Retirement Plan may be right for your key employees. To help you develop a SERP based upon your objectives and situation, make your financial representative a valuable member of your business planning team.
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