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Recruit, Retain, Reward.
Finding and retaining the right talent for your organization is key to the success of many companies today.
As the competition to attract these people for your company continues to heat up, you need to have a strategy to help you get and keep these highly talented and driven employees.
A part of their overall compensation package, did you know that 95% of all corporations provide supplemental executive benefit plans, such as salary continuation plans, deferred compensation plans and other benefit packages to their key executives?
ING can help you compete in the market when it comes to providing executive benefits to your key employees. There are a number of ways you can use life insurance as a means to fund an executive benefit plan that makes the most of the dollars you put towards the plan.
Today, it’s not a matter of can you afford to fund a plan, it’s now a matter of can you afford not to?
Types of Executive Benefits
401(k) Look-Alike Plans
A non-qualified 401(k) look-alike plan with life insurance gives your valued executives the opportunity to defer larger amounts of pretax income. As an employer, this type of plan:
- Helps you attract and retain top performers
- Can be implemented on its own or in conjunction with an existing qualified plan
- Avoids the stringent IRS requirements of qualified plans.
- Requires minimal ERISA compliance when properly structured
- Can be informally funded with life insurance
- Can provide cost recovery through the income tax free death benefit.
Nonqualified Deferred Compensation Plans
To overcome the limits of qualified retirement plans, many employers are offering top executives something extra – a non-qualified deferred compensation plan. Under this voluntary arrangement, each selected executive elects to defer a certain amount of future income (deferral can be salary or bonus). Upon retirement, you pay the executive his or her deferred compensation as additional retirement income.
Supplemental Employee Retirement Plans (SERP)
A SERP provides the additional benefits desired by executives, and they allow you, as the employer, to maintain control. By implementing a plan that imposes “golden handcuffs” – restrictions that can reduce or even cause the loss of benefits for the executive if they leave your firm – your ensure a cost-effective method of rewarding and retaining talented management.
Executive Bonus Plans
An executive bonus plan is a way for the employer to “bonus” the employee an amount of money used to fund a life insurance policy. The employee simply pays income tax on the bonus applied as premium. In future years, the employee can draw on the cash value of this policy through loans or withdrawals, and in the event of his or her death, the employee’s family receives the death benefit.
Split Dollar Plans
This type of plan lets you buy the full amount of life insurance coverage you need without paying the premiums personally, the business pays them instead. Your cost is the “economic benefit value” of the life insurance protection. The business is able to recover the greater of the premiums it pays or the policy’s cash value from the policy death benefit upon your death.
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