Company's Advantages with Supplemental Executive Retirement Plans

Supplemental executive retirement plans using life insurance have several financial advantages to the company:

Cash value within the employee's life insurance policy accumulates tax deferred

The company can select the executives it wants to reward with the SERP supplemental benefits

The company controls the SERP plan, owns the policies and has access to policy's cash value

SERP Plans are easy to implement and require no IRS approval

 Executive Advantages with Supplemental Executive Retirement Plans

Supplemental executive retirement plans using life insurance also have several advantages to the key executive:

The SERP plan can be custom designed to meet the key employee’s specific needs

Supplemental retirement income can be accumulated without incurring any up front taxes

In the event the executive dies, the life insurance policy death benefits are available to fund the plan and provide a lump sum benefit to the executive’s beneficiary subject to the terms of the agreement

Summary of SERP employee advantages

• Income Tax-Free Death Benefit

• Death Benefit Payable Directly from Insurer

• Low Cost

• Portability (employee can be given right to acquire employer’s interest at termination)

• Estate Taxes – plan can be structured to keep death proceeds out of employee’s estate