Our focus and biggest value add is in designing plans, from a structural and plan provisions perspective, that provide ways for executives and companies to accumulate wealth on a tax favored basis.
Our expertise is in plan design, funding, financing, implementation, and administration of non-qualified executive benefit plans to better attract and retain executive talent for publicly traded and privately held companies as well as financial institutions.
Executive Benefits Focus
Deferred Compensation Plan (DCP)
Concept where an executive can elect to defer, pre-tax, an unlimited amount of compensation (salary and/or bonus) and receive that compensation as a distribution at a specified period in the future (distributions are taxable as ordinary income). This deferral grows tax-deferred and the plan is not subject to discrimination testing unlike qualified retirement plans.
Long Term Incentive Plan (LTIP)
A company paid benefit designed to help the company achieve specified performance goals and retain key talent. Contributions are performance-based and can vest over time. Benefits accrue tax deferred and may be received during employment or at retirement.
An executive owned, company endorsed benefit that allows the executive to contribute unlimited after-tax dollars. The executive directs the company to make contributions into the plan from their compensation. Distributions are income tax-free by way of withdrawals up to basis followed by loans taken against the policy thereafter. Plan can also provide asset protection.
Life insurance policy on an individual where the death benefit is shared between the company and the individual. Premium payments are made by the company and Split-Dollar Plans are typically structured to where the company is reimbursed for their premium payments upon the death of the executive.
Supplemental Executive Retirement Plan (SERP)
A company paid benefit designed to maintain the executive’s employment until retirement when the executive will then receive this as a stream of taxable income. Contributions can be made through defined contributions during employment and accrue tax-deferred or the benefit provided at retirement can be a defined benefit which is based on a formula (e.g. 50% of the executive’s 3 year average salary).
Executive Disability Income (EDI)
Allows for income replacement for a specified duration (typically through age 65) in the event an individual suffers a disability and is unable to work. EDI typically picks up where Short-Term Disability ends, and the plan can be structured in a number of ways including whether or not the individual is able to find work in their current occupation (own occupation).
Executive Long Term Care Plan
Insurance used to offset costs associated with assisted living expenses from a care giver. These benefits are received income tax-free with a guaranteed death benefit and return of premium if the Long Term Care is not used. Premium payments can be made after-tax by either the company or the individual and the policy is individually owned.
Estate Preservation Plan (EPP)
A company paid benefit that creates an asset outside of the executive’s estate. At death, the tax-free death benefit can be used to offset the executive’s estate taxes.