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Category: employee compensation plan
employee compensation plan

Supplement Executive Retirement Plans – Advantages and Disadvantages

Supplemental Executive Retirement Plans (SERPs) have advantages and disadvantages to consider when determining if they are the right solution for an organization. The advantages to an employer of establishing and using a Supplemental Executive Retirement Plan include the following: The plan provides “golden handcuffs” because benefits are forfeitable by the

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Kevin Wenke February 4, 2021
employee compensation plan

When Does an Executive Receive SERP Benefits?

Supplemental Executive Retirement Plan (SERP) benefits are typically paid out to the executive when one of three events occur. The three events are: The participating executive retires At the death of the executive to their beneficiaries. The participating executive becomes disabled The methods how SERP benefits can be paid depends which situation requires their

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Kevin Wenke February 4, 2021
employee compensation plan

Requirements to Avoid Current Taxation of SERP Benefits to the Executive

A business setting up a SERP may want to avoid current taxation of the SERP benefits to the executive. An important characteristic of SERPs is that they avoid current taxation of SERP benefits to the executive until the benefits are actually received by the him or her. However, to ensure deferred (rather

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Kevin Wenke February 4, 2021
employee compensation plan

Trusts Used To Hold Funds For SERP Benefits

There are two types of trusts used to hold money used to fund Supplemental Executive Retirement Plans. Although any business involves a level of risk, small businesses generally expose their owners to an increased risk level. It is the uncertainty of business that renders many nonqualified retirement plans such as

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Kevin Wenke February 4, 2021
employee compensation plan

SERP Funding – Life, Disability and Critical Illness Insurance.

Using insurance such as cash value life insurance, disability insurance and even critical illness insurance can provide your key employee with the compensation they desire in order to stay with your firm. A SERP is sometimes categorized as a deferred compensation plan. However, unlike a true deferred compensation plan under

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Kevin Wenke February 4, 2021
employee compensation plan

5 Ways to Put “Golden Handcuffs” On Your Key Employees To Recruit, Retain and Reward Them

Golden Handcuff employee compensation plans are used to recruit, retain and reward key employees in any business. A “Golden Handcuff” employee compensation plan is an additional compensation benefit that requires an employee to stay employed with a company for a specified period of time in order to receive an additional payment in

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Kevin Wenke February 4, 2021