Retaining your company’s key executives is tantamount to its continued growth and success.  How can you prevent your best execs from exiting the company?  By offering them an enticing executive benefits plan that promises long-term financial security -- provided that they stay on board for the long haul.  .

Bill Gray, Vice President, Retirement Plans, explains how customized executive benefit solutions can help your company stay ahead in today’s market.

Q: Why has offering a comprehensive executive benefit package become so essential in today’s market?

BG: Competitive pressure, corporate governance issues, as well as changes in legislation and tax reform have caused major changes in how executives are compensated. A comprehensive executive benefit package is essential for attracting and retaining key talent.

Q: What is the main benefit of an Executive Benefit plan?

BG: Executive benefit plans are gaining popularity because they don't discriminate against highly compensated executives. Instead, executive benefit plans allow a corporation to provide valuable benefits designed specifically for highly compensated executives.

Q: What types of plans are available?

BG: There are many different types of plans available, including:

• Supplemental Executive Retirement Plans (SERP)
  SERPs mirror or supplement a specific retirement plan.
  With a SERP:
• Employee contributions are usually not required.
• Employees pay no federal income taxes on the benefits until they are received.
  
  
• Deferral Plans
  Deferral Plans allow for pre-tax contributions that "mirror" 401(k) contributions lost under non-discrimination limitation rules. Contributions can, and often do, substantially exceed these lost contributions. The company can establish the contribution limit at any level that it desires.
  With Deferral Plans:
• Employees reduce their current income tax liability.
• Funds and earnings grow tax-deferred.
• The employer can make matching contributions to make up for contributions not allowed in a 401k plan.
  
  
• Executive Bonus Plans
  Executive Bonus Plans enable select executives to own cash value life insurance.
  With Executive Bonus Plans:
• There is tax-deferred accumulation.
• The death benefit is income tax-free for the person named as the beneficiary of the executive. 

Q:  Sounds like there are a lot of choices.  How can companies design the right executive business plan for their executives?

BG: It’s usually best to work with an outside consultant or firm that specializes in executive benefits planning.  For instance, NIA  works with companies of all sizes to help them design a unique executive benefit program that is both cost-efficient and effective in helping their executives meet their personal goals within the context of their business’s overall financial goals.

If you would like learn more about executive benefit programs, you can contact your NIA insurance advisor directly or Bill Gray, Vice President , Retirement Plans, at 201-336-1311.  You can email Bill at bgray@niagroup.com.