Supplemental Executive Retirement Plans (SERPs)

Your business can’t succeed without the right people in place. With many executives challenged in saving for retirement because of qualified plans’ limits on contributions and benefits, additional retirement savings options are a must for your business to attract and retain the top executives you need. A supplemental executive retirement plan (or SERP) provides additional retirement benefits to executives to offset the limits on qualified retirement plans.

Reward the Executives You Need the Most

A SERP is an employer-sponsored, non-qualified deferred compensation plan, where you agree to provide supplemental retirement income to selected key executives. You may wish to include a vesting schedule on these benefits to encourage your executives to remain employed with your institution. Some plans may allow for distributions while the executive is still employed and may even offer survivor benefits should the executive die before the SERP benefits are fully distributed. A SERP is a valuable compensation and benefit tool for attracting, retaining, and rewarding key members of your leadership team.


Benefits to Executives

  • Benefits help close the retirement income gap
  • Plans may be customized to meet each executive’s individual needs
  • If properly structured, executives should not be taxed on benefits until actual receipt or when risk of forfeiture has passed
  • Unlike qualified plans, no 10% penalty for distribution prior to age 59½

Benefits to Your Institution

  • Valuable tool for attracting and retaining hard-to-find employees
  • Vesting and no-compete provisions available
  • Your business controls the plan and how it’sfunded
  • Customizable plans allow for performance objectives for each executive
  • Assets and liabilities used to fund the plan appear on the employer’s balance sheet

The success of your business is often determined by the quality of your employees and their ability to deliver the results you desire. By providing a SERP, you can reward your key employees for driving business growth and operational excellence while encouraging a more cohesive and aligned management team.

Contact us today for a thorough review of your compensation strategy with one of our experienced executive benefits consultants. 

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