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.
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.
Your can select the Key Executives who will participate. You can offer different executives different benefit levels.
You can tailor the plan to meet your executives’ needs, and vary benefits and timing based on what is most appealing them.
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.
Your business gets a tax deduction when it ultimately pays the benefit.
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.