top of page
Senior Tourist

Executive Supplemental Retirement Plans

A supplemental executive retirement plan (SERP) is another way to reward and retain key employees by providing additional compensation for key employees and persuade them to remain with the company longer.

Coverage Highlights

Let Corporate Financial provide your company with a supplemental executive retirement plan, also known as a (SERP). An executive supplemental retirement plan can be a highly effective way to provide additional compensation for a handful of key employees and persuade them to remain with the organization longer. A SERP has numerous advantages both for the business and its key employees.


Supplemental retirement income funded by a life insurance policy

Although executive supplemental retirement plans could be paid out of cash flows or investment funds, most are funded through a cash-value life insurance plan. The employer buys the insurance policy, pays the premiums, and can access its cash value. The employee receives supplemental retirement income paid for through the insurance policy. Once the employee receives income in retirement, that benefit is taxable. At that point, the employer receives a tax deduction.


Numerous benefits for the business and employee

Executive supplemental retirement plans are attractive to employers. They’re easy to implement, they don’t require IRS approval, and organizations can decide which employees will receive this benefit. The employer can structure the life insurance policy to allow the company to recover its cost.


Corporate Financial can help you structure a plan so that your employees benefit from receiving a supplemental retirement benefit that is only taxable when they receive income in retirement. At that point, most executives will be in a lower tax bracket than when working. The plan can be tailored to meet the specific needs of individual employees.


Design: Defined benefit or defined contribution? Let Corporate Financial help you find the right fit. 

There are a variety of possible SERP designs. Most commonly, they are designed as defined benefit or contribution plans.


A defined benefit executive supplemental retirement plan provides a benefit in the form of an annuity at retirement. When added to the employee’s projected income from the qualified retirement plan and Social Security benefits, the annuity will equal a specified percentage of the employee’s final average compensation, much like a traditionally defined benefit pension plan.


A defined contribution executive supplemental retirement plan provides periodic contributions to an individual employee account. The money remains invested for the employee until retirement, death, or a disability triggers payment.


Let’s schedule a time to discuss all of the possibilities to help your firm attract and retain key executives in your firm.

bottom of page