Our plans help you attract and retain the best candidates.
It’s crucial that your organization put together the most attractive, competitive, cost effective, executive compensation package. Baby boomers are retiring in record numbers, leaving employers to compete in a more demanding employment environment.
Supplemental Executive Retirement Plans (SERPs)
SERPs pay executives a negotiated or agreed-upon amount of supplemental benefits primarily based on a vesting milestone and other eligibility conditions (e.g. retirement, years of service, etc..). As a nonqualified plan, one Not Governed by ERISA Guidelines, it can only be offered to Highly Compensated Employees or executives who are limited in qualified plan contributions, which are Governed By ERISA Guidelines. The executive receives the payout based on an event driven vesting schedule and pays taxes upon vesting, excluding 457(b)s which act more like 401(k)s. These plans are excellent retention tools.
Non-qualified Deferred Compensation Plans
SERPs have two plan types and are governed by IRS rules: 409(a) For-Profit Organizations and 457(f & b) Not-for-Profit Organizations. These plans allow companies to enhance benefits and provide alternatives to executives. The plans can help defer tax liabilities and allow for structured payouts to meet the executive and the originations long term retention and retirement goals. Non-qualified deferred compensation plans are extremely flexible and can be structured as milestone bonuses (e.g. retirement, years of service, etc..) or as a retention tool for an executive team and are specific to the executive.
Split Dollar Life Insurance
Collateralized Split Dollar Life Insurance Plans are complicated and require a clear and detailed understanding of their use. The strategy shares the cost and benefit of the Life Insurance Policy between the employer and the employee. The program (split dollar) and the product (life insurance) provides a tax preference benefit for the executive, and a retention opportunity for the employer usually associated with milestones, such as length of service or retirement.
The primary reasons for using this type of plan are tax and regulatory related. However this needs to be looked at carefully as the cost of insurance can be prohibitive and the program has a long tail; 20, 30 or even more years. The Life Insurance Policy acts as collateral for the organization, which lends the premium to the executive. A promissory note is signed and a plan document is created defining the terms of the agreement. Where appropriate this can be a very effective tool.
The primary reasons for using this type of plan are tax and regulatory related. However this needs to be looked at carefully as the cost of insurance can be prohibitive and the program has a long tail; 20, 30 or even more years. The Life Insurance Policy acts as collateral for the organization, which lends the premium to the executive. A promissory note is signed and a plan document is created defining the terms of the agreement. Where appropriate this can be a very effective tool.
Post Distribution Asset Management
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Grey Ledge Advisors provides personalized asset management services for your retiring executives. We have years of experience working with high net worth clients to protect and grow their portfolio value and provide an appropriate income during retirement. Our portfolio management services for our non-qualified deferred compensation plans or total benefits pre-funding can be modified for an individual investor’s risk profile and income needs in retirement.
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