Supplemental Retirement Plans

One of the most effective ways an employer can assist executives in reaching target retirement goals is through a nonqualified supplemental executive retirement plan (SERP), which provides additional retirement benefits. With SERPS, also referred to as Top Hat plans, executives do not defer current salary or bonuses because the dollars used are provided entirely by the employer.

There are many types of SERPs such as offset plans or excess benefit plans, and they may be tied to the employer's qualified retirement plan. In calculating benefit formulas, employers may select a defined benefit or defined contribution. Defined benefit provides a stated monthly and annual amount at retirement; defined contribution specifies a calculation based on lost benefits.

There are also many plan versions and unlimited benefit and contribution formulas that may be used in plan design. What's more, careful consideration of withholding rules, tax implications and golden parachute payments is essential.

Contact us to discuss a SERP plan for your company.