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In an increasingly competitive marketplace, a company’s survival often depends on its ability to recruit, retain and reward key employees. You may need extra incentives to accomplish this goal. That’s because the best people are always in demand and are often approached by headhunters or competitors. Putting a strategy in place that includes targeted executive benefits, can help you keep your key people loyal to you and your company.
Given the limits imposed by the IRS on contributions to traditional qualified retirement plans, highly compensated executives may find it difficult to achieve their retirement goals. A non-qualified plan can add the flexibility that key executives need to accomplish this goal as well as provide a way of aligning the goals of the firm and its executives.
With the right benefits program in place, a company can worry less about retaining and rewarding key executives and concentrate more on the strategies that make the business successful.
Unlike qualified retirement plans, you can selectively target any employee or group of employees for additional rewards and incentives and provide opportunities for pre-tax deferral into a retirement program not subject to the IRS limits that are imposed on 401(k) other type of qualified plans.
These plans are typically designed to provide future benefits to an executive or business owner in the event of retirement, death or disability. They can also be utilized as a paired funding technique for buy/sell agreements and are also intended to supplement a qualified retirement plan.
This type of plan provides subsidized life insurance coverage for executives’ beneficiaries.
These plans can be structured in various ways to provide additional bonuses to executives via tax preferred vehicles. Additionally, these types of bonuses can be restricted and released to the executive only upon hitting certain company goals and/or milestones.