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Wealth Control Advisors, LLC
60 William Street, Suite 200
Wellesley, MA 02481
781-235-8891 MA telephone
781-235-8890 private fax
866-235-8991 outside Mass.
10781 Waterford Place
West Palm Beach, FL 33412
561-691-1380 FL telephone
info@wealthcontrol.com
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Key Employee Benefits & Nonqualified Deferred Compensation Plans
The use of Key Employee Insurance, often called Key Man Insurance, is used as part of Non Qualified Deferred Compensation planning. Wealth Control Advisors, LLC located just outside of Boston, Massachusetts and West Palm Beach, Florida, works with your company to cost effectively AIM (Audit, Integrate, and Manage) your employee retention program. For more information, contact us online or call us at 781-235-8891 our Wellesley, MA office or at 561-691-1380 our West Palm Beach, FL office.
Key employee insurance is a policy which pays a death benefit to the business for the economic loss that occurs when a key employee dies. The business purchases the life insurance to cover the life of the employee who is critical to the ongoing success of the business, and names the business as the beneficiary. If that key employee dies, the policy proceeds are paid to the business to help keep the business going as it seeks to fill the void left by the deceased employee.
Non Qualified Deferred Compensation
Non Qualified Deferred Compensation may take the form of Restrictive Endorsement Bonus Arrangements (REBA), Supplemental Executive Retirement Plans (SERP), Salary Continuation Death Benefits, Long Term Care Insurance Plans, and even Personal Financial Planning For Senior Executives.
Advantages to the employer
For an employer, a deferred-compensation plan or executive benefit plan:
- Attracts talented people. High-caliber employees are always in demand. To compete successfully for new employees, employers must offer attractive compensation packages.
- Retains key employees. The payment of deferred-compensation benefits is usually contingent upon performance. For example, the employee will receive the promised retirement and death benefits only if actively employed at the time payments commence.
- Is a selective fringe benefit. The employer is not required to include all employees in this program. The executives know they are among the “chosen few” selected to participate in the program.
- Is a flexible fringe benefit. Deferred-compensation plans can be individually tailored to complement other salary and benefit programs. Special consideration may be given to the employee’s objectives when designing a plan.
- Has a cost that may be predictable.
- Offers simple plan administration. These plans do not require Treasury Department approval. When established for “select management or highly compensated employees,” they are not subject to many of the requirements of the Employee Retirement Income Security Act of 1974 (ERISA).
Advantages to the employee
For an employee, a deferred-compensation plan offers:
- Preretirement death benefits. A deferred-compensation plan can be set up so that all or part of an employee’s salary will continue in the event of pre-retirement death. The death benefit provided for the employee’s family may be paid in the form of a lump sum or as salary continuation over a period of years.
- Increased retirement income. The living benefits provided by the plan usually entail payments for a number of years after retirement, although it is possible to continue the payments for the lifetime of both the employee and the surviving spouse. The “ceiling” imposed on qualified-plan benefits make nonqualified deferred compensation, used to supplement other retirement and Social Security benefits, particularly attractive to highly compensated employees.
- Greater net income. Net income from a deferred arrangement will often be greater than alternative planning methods.
Learn more about our Tailored Services, or see Case Study 7: Midsized Company Benefits Bonus Program and Case Study 3: New Key Manager at Company for an examples of our work.
To learn more about our comprehensive business services, call us at 781-235-8891 or contact us online.
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