Traditional Deferred Compensation Plans (including SERPs). In a deferred compensation plan, the executive defers a portion of his or her present compensation until retirement. In a Supplemental Executive Retirement Plan, the employer will provide funding for a defined benefit or defined contribution plan for a select few people. Under a properly designed plan, no taxes are due on the money until it is received. Some plans also promise to pay the executive's spouse a benefit if the executive dies before retirement. Others will pay the executive a certain amount in the event of disability. Often life and disability income insurance policies are used to help informally fund the payments.
|
