Supplemental Executive Retirement Plan (SERP)
The value of offering customized benefits to business owners and selected key employees can be important. Since there are limitations on contributions or benefits received from qualified plans, a SERP can be an attractive benefit.
A SERP is an employer paid deferred compensation agreement that provides supplemental retirement income to a participant, based on the employee meeting certain vesting or other specified conditions.
Because it’s designed to supplement the company’s basic retirement benefits package, a SERP plan can help address an executive’s retirement income shortfall.
How a SERP works
- Cash values accumulate tax-deferred.3
- A SERP can help businesses recruit and retain valuable employees.
- Unlike qualified plans, the business decides which employees participate.
- A SERP requires less administration and funding requirements than traditional qualified plans.4
- The death benefit proceeds may help the business recover plan costs.
Read our case study: Retaining top talent (PDF)