NonQualified Benefit Plan Examples

Benefit Securitization Strategies

The principal purpose of a Supplemental Executive Retirement Plan (SERP) is to ensure adequate post-retirement income for selected senior executives. Under these plans, executives receive benefits beyond those provided by the employer's qualified retirement plan.

WHY A SERP?

SERPs are beneficial to executives and employers for many reasons. For the executive, the principal benefits are the supplemental retirement income and survivor benefit in the event of the executive's premature death.

The benefits are usually carefully defined based on a target and easily understood by the executive. Typically, SERPs do not require that performance goals be achieved, but do require continued employment to a specified age for eligibility. As opposed to many other forms of compensation, the executive is able to defer tax on the earned benefits until they are paid, usually after retirement.

Today, SERPs are a popular form of compensation and continue to be highly favored by many executives. As defined above, SERP benefits are carefully crafted to ensure a perfect retirement plan for the executive. The Cochlan Group takes a comprehensive look at a company's SERP objectives, and offers customizable solutions that benefit both the company and the key employee.

Contact a Bank Consulting Group representative for more information regarding the implementation of a properly defined SERP for your financial institution.