Supplemental Executive Retirement Plan
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SERPs Offer Key Employees Another Retirement Benefit

A supplemental executive retirement plan, or SERP, is a benefit you can offer to provide retirement income for a group of key employees.

As the employer, you’ll have the flexibility to choose either a fixed-dollar benefit amount or a formula-based benefit amount for your employees, based on participant compensation and/or years of service. You can also design the plan to provide reduced benefits if the employee separates from service before retirement age.

Potential employee benefits

  • Taxes on income are deferred until the employee receives distributions
  • There are no required minimum distributions at age 70½
  • Employees may take distributions before age 59½ without penalty
  • Plan has an easy-to-understand formula driven benefit

Potential employer benefits

  • You can choose the employees that participate
  • The company can recover out-of-pocket costs through the life insurance death benefit
  • The employee’s benefit is predictable for retirement and accounting purposes

Products used to fund SERPs

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