Key Employee Retention

Non-qualified deferred compensation plans

Competitive benefits packages can help attract, reward and retain key employees. A nonqualified deferred compensation (NQDC) plan can help participants—including highly paid executives—fill the gap between their pre- and post-retirement incomes. A NQDC plan can provide employers with more than just a powerful tool to attract and retain top performers. As a leader in coordinating all of your retirement plans into one comprehensive program, we can show you how your defined benefit (DB), defined contribution (DC), and NQDC plans can work together to help advance your employees’ plans for retirement and your organization.

Flexible and Low-Cost Retirement Plans

NQDC plans can be a good fit for closely held organizations that may need a benefit to attract key non-shareholder employees. Through a NQDC plan, employers can generally select plan features like deferral limits, matching contributions and investment choices. The costs and administrative burden of a NQDC plan may potentially be lower than many defined contribution ERISA plans. Moreover, a NQDC plan can provide you with confidence in knowing you are providing your key executives with tools to help them prepare for retirement.

Tax Advantages for Employees

Participants in a NQDC plan are generally able to defer higher amounts of income on a pretax basis than is possible through qualified retirement plans. This helps participants — including highly paid executives — fill the gap between their pre-retirement income and their post-retirement income.

Split Dollar Plans

For key executives, whole life insurance can provide security and liquidity for any number of purposes. This includes family income replacement and access to policy cash values in excess of employer’s interest to meet executive’s financial needs.1

A so-called Split Dollar loan regime arrangement is a way to fund life insurance where there is a clear need for added security and the financial enhancement that it provides. A Split Dollar loan arrangement can be used by employers to attract and retain key employees. Executives are able to prepare for retirement and estate planning by a less costly means, and beneficiaries generally obtain a federal income tax-free death benefit. Further, as the cash value of the policy grows, amounts in excess of the loan receivable by the employer can be available for the benefit of the executive and his or her family.

1 Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

Executive bonus plans

Attract and retain top talent by providing a customized supplemental retirement benefit [“Executive Bonus”] for select employees, beyond those offered in the company’s qualified retirement plan. In addition, the Executive Bonus Plan provides death benefit protection for the employee’s family in the event of the person’s premature death.

How will you maintain your competitive edge as an employer?