Executive Benefits

Properly Structured Executive Benefit Plans are a great tool for employers to attract, retain and reward the executive talent that is necessary to give your company the competitive advantage. It is prudent to do a regular review of Employers non-qualified benefit plans. This review will ensure that such plans continue to meet the companies’ goals, objectives and costs while minimizing risk. Corporate Financial’s professionals are experienced and can help you in reviewing existing executive benefit plans, establishing new executive benefit plans. If an analysis reveals a need for recommendations we will do so. This recommendation may include but not be limited to updating existing plans to meet today’s best practices and standards.

A Deferred Compensation plan is a non-qualified plan used for a select group of corporate executives. The plans are used to recruit, retain and reward top executives. Many times these programs are implemented to provide pre-tax income deferral opportunities that many executives do not have because of 401K contribution limits. Some of the key features of deferred compensation are: Plan participants save money on a pre-tax basis Defer taxes on earnings associated with the income until distribution Allocate income deferred among investment options The employer can pick and choose among the recipient employees without regard to years of service, salary level or any other criteria The plan is not subject to qualified plan limitations on the amount of annual income that may be deferred to the plan

Most companies provide a group disability policy for all employees with a benefit percentage of 60 percent. The trouble with this approach is that most benefit maximums are usually too low for highly compensated executives. Many times the high earning executives are being reversibly discriminated against and only replacing 45 percent or less of salary. To make matters worse the benefit on group plans are usually taxed. Now when the executive needs the benefit the most, there is an even greater short fall. Many companies try to fix the problem by raising the group plan maximum limit. This approach has pitfalls: the higher maximum raises the premium rates for all employees, higher maximums usually do not cover income replacement for executives and creates a tremendous claim liability for the entire group. If one executive becomes disabled the claim reserve is huge. Inevitably, the extra claim reserves will cause the premiums to increase for the entire group. The end result, the company pays more for high maximum group disability programs, accepts more exposure usually with no medical underwriting. Corporate Financial has a better solution: We analyze and redesign group platforms that serve as a chassis for executive individual disability policies, usually with no medical indemnity. These executive individual disability policies can: Protects income over the group plan limits The policy is portable and rates will not increase Benefits will keep pace with inflation Can include bonuses, stock options, and 401K contributions, Deferred Compensation An executive disability program can give your company the competitive advantage in recruiting, retaining and rewarding key executives. It can also help your company to have: Premium Savings Stable Premiums Reduce Claim Exposure Liability Improve Benefits

It is very important for companies to recruit and retain loyal competent directors. In today’s ever-litigious environment and high shareholders expectations, the director’s role has become very risky and challenging. Many of the executive benefit plans that have been used effectively for key executives can be modified to meet the needs of your company directors. A director’s benefits plan can help compensate the directors for the increased responsibility of their role. This can enhance recruiting, retaining and rewarding the members who serve on your board of directors.

A 401(K) Excess Plan enables highly paid executives to defer amounts in excess of the deferral limitations set forth in a typical qualified 401(K) plan. For a select group of highly paid executives, the 401(K) Excess plan can be an instrumental tool to help recruit and retain the best executive talent. A properly designed 401(K) Excess Plan: Maximizes Savings opportunities Attracts and retains top talent Is not limited to ERISA regulations Motivates executives to accomplish goals and achieve success for the organization Flexible

Are your assets worth more than $ 1,000,000? Assets include: Residence Other real estate Investments (stocks, bonds, mutual funds) Savings accounts (bank accounts, money markets, CDs) 401(k), pension, IRA Ownership in business Motor vehicles (automobiles, boats, planes) Jewelry Life insurance and annuities Other personal property Are your assets worth more than $ 1,000,000? If your assets are worth $ 1,000,000 or more, estate planning may benefit your heirs. Plan ahead so that your assets go to your loved ones not the IRS. Estate taxes can claim as much as 55% of your estate. Successful estate tax planning transfers your assets to your beneficiaries quickly and usually with minimal taxes. One technique is to use the leverage of life insurance with a properly designed irrevocable trust. With proper planning, the proceeds from life insurance held by the trust may pass to the trust beneficiaries without income or estate taxes. This will give your loved ones the cash that may be used to pay estate taxes or other expenses, such as debts or funeral costs. Estate tax planning is a dynamic process. Just as people, assets and laws change, it may be necessary to adjust your estate plan periodically to reflect these changes. If you are looking to implement an estate tax plan or review an existing one, Corporate Financial has the experts to help.

Long-term care policies cover a broad range of supportive medical, personal and social services required by people who are unable to meet their basic living needs for an extended period of time. It is estimated that by the year 2020, 12 million older Americans will need long-term care. Long term care can be expensive. The national average for a private room, in nursing home care, is $69,400 per year. Home care also adds up. For in-home care assistance, the national average is $37,000 a year for 40 hours of help a week. At an assumed 5% inflation rate, a year in a nursing home could cost over $112,000 in just ten years based on national averages. Smart planning now is essential for a comfortable future. Long term care cost varies depending on the company, the policy benefits, and your health and age. Personal care and home care benefits will add to the cost. Higher or lower ages and/or higher or lower benefits will affect the cost accordingly. Let the professionals at Corporate Financial assist you in finding the right plan.