Wealth Accumulation Plans

Compensation Designed to Attract Best-In-Class Executives

Competitive compensation design attracts best-in-class executives. Providing executives with the opportunity to build wealth over the long term is essential to fostering loyalty and commitment.

Highly compensated executives are restricted from accumulating adequate savings for a comfortable retirement due to annual dollar limits imposed under 401(k) plans. Executives are often limited under these plans to an annual savings rate of less than 6% of pay.

Our Executive Benefits advisors help clients design wealth accumulation strategies that provide favorable income tax results for executives to solve this problem.

We customize tax advantaged solutions to help executives supplement the organization’s retirement plan and bring parity to highly compensated employees in relation to their salary levels. Whether these plans are pre-tax Non-Qualified Deferred Compensation Plans, Mirror 401(k) plans, Supplemental Executive Retirement Plans (SERP), Annuities or after-tax 162 Bonus Plans, we will help design, implement and monitor your benefits in a way that provides a clear and effective wealth accumulation program to your executives and keeps them focused on their role.

Deferred Compensation Plans
Executives are permitted to defer a portion of their own income to accumulate for future financial needs, such as retirement. These are very effective since the Qualified Retirement Plan (i.e., 401(k)) is inadequate and non-competitive for the executive group.

Voluntary salary deferral plans can be offered at no cost to the employer. These plans are often referred to as “mirror” plans as they are designed to mirror the provisions of the 401(k) plan without the severe savings limitations imposed by those plans.

Supplemental Executive Retirement Plans (SERP)
To participate in a SERP the employer sets aside a predetermined dollar amount each year to supplement a base retirement program. The SERP “fills the gap” resulting from qualified plan compensation, benefit and contribution limits. Benefit cost to the organization is based on the appropriate level of benefit promise to be market competitive and retain executive talent.

After -Tax Deferred Compensation (162 Bonus) Plans
After-tax accumulation plans help accumulate wealth for retirement with appropriate restrictions to assist with executive retention value without the solvency risks inherent in non-qualified plans. These program designs also help executives to properly diversify their personal income tax exposure by combining a pre-tax retirement savings strategy with an after-tax approach. Benefit cost to the organization is based on the appropriate level of benefit promise to be market competitive and retain executive talent.

Individual Annuities
Annuities provide guaranteed income on a tax deferred basis. While able to provide security of principal and guaranteed growth strategies, variable annuities can also offer investors the upside of investing in the market while protecting the downside of market volatility. Withdrawal strategies offer great flexibility to meet the personal needs of the executive.

Corporate Owned Life Insurance (COLI)
Financing Deferred Compensation Plans or Supplemental Retirement Plans through COLI provides organizations significant income tax benefits. Life insurance provides companies with the opportunity to accumulate income-tax-free gains on the invested plan assets.

412(e)(3) Defined Benefit Plan
Are you looking for a tax efficient way to save money? Do you want to leverage the tax code while diversifying your assets? Looking for an independent low risk option? If so, a 412(e)(3) Defined Beneft Plan may be the answer.