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Supplemental Executive Retirement Plans

Designed for your highly compensated key executives who may be getting less value from your traditional qualified retirement plan because of contribution limits.

Why your highest-paid, top performers may really need supplemental retirement funds

Traditional retirement plan options can leave highly-paid executives unprepared for retirement.

Traditional retirement plan options can leave highly-paid executives unprepared for retirement.

Highly-compensated individuals often struggle to save enough for retirement because of compensation limits for qualified retirement plans. And, if you offer a defined benefit plan, it's difficult for them to qualify for a high enough pension benefit to support their lifestyle when in retirement. 


If you want to reward your top executives and keep them loyal, a Supplemental Executive Retirement Plan (SERP) may be right for your business!

You can informally fund SERPs with Life Insurance

You can informally fund SERPs with Life Insurance

  • You sign a SERP agreement with your key executive and agree to provide a specified retirement and death benefit. You can base these benefits on a flat amount, a salary percentage, or other formula.  To informally fund the plan with Life Insurance taken out on the key executive, you will provide the proper notice and consent required by law.
  • Policy cash values can be used to pay the retirement benefits1 which are tax deductible. Or, it may be more advantageous to pay the tax-deductible benefits from current cash flow and recover the cost of the benefit payments through the eventual receipt of the death benefit proceeds from the policy.
  • In case of death before reaching retirement, your business receives the policy’s death benefit income tax free and can also deduct the payment of the agreed-upon death benefits to survivors.

Flexibility

Your can select the Key Executives who will participate. You can offer different executives different benefit levels.

Customization

You can tailor the plan to meet your executives’ needs, and vary benefits and timing based on what is most appealing them.

Financial benefits

The life insurance policy grows tax-deferred and is listed as an asset in your corporation’s books. The death proceeds can be used to help recover plan costs.

Tax advantages

Your business gets a tax deduction when it ultimately pays the benefit.

Fill out this form to let our team help you structure your Executive Benefits package to be more advantageous to you, your business, and your most valuable asset: your people.

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1 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under age 59½, any taxable withdrawal may also be subject to a 10% tax penalty.