Deferred Compensation

Have your key executives maximized their retirement plan contributions? A Deferred Compensation program is a selective fringe benefit that provides key executives with supplemental retirement benefits or pre-retirement death benefits for their family members utilizing life insurance. This program is designed for highly compensated executives.

How does a Deferred Compensation program work?

Your business enters into a non-qualified deferred compensation agreement with a key employee. The executive elects to defer a certain amount of current or future income. Your company uses the executive's deferred compensation to purchase life insurance on the executive's life.

Employer advantages of a Deferred Compensation program

Plan has minimal ERISA requirements and can provide selected employees with supplemental benefits.

  • Your company can pick and choose who you want to participate.
  • Your company elects to use life insurance to indirectly fund the deferred compensation program.
  • The company owns the policy and carries the cash value as an asset on its balance sheet.
  • The cash value accumulates on a tax deferred basis.

Employee advantages of a Deferred Compensation program

  • Plan can be custom designed to meet executive's individual needs.
  • Retirement income is accumulated in the life insurance policy cash value without current taxation to the executive.
  • The plan, through the insurance policy's death benefit, can be self-completing in the event of the executive's death.
  • Payments are made to the executive at retirement to supplement retirement income or to the executive's family and heirs at his/her death.