Most Americans consider retirement security to be one of their primary financial concerns. This is especially true for executives since Social Security provides a
highly compensated employee with a modest amount of retirement income

Many executives are also concerned because tax law changes over the years have drastically reduced the ability of qualified retirement plans to provide adequate retirement income. The reduction of the eligible compensation limits is just another recent example of this trend.

Retirement concerns faced by executives also coincide with challenges that employers face in attracting and retaining top talent. Retirement benefits, given their level of importance to exectives, have become an extremely effective retention tool used in compensation planning today.

A nonqualified deferred compensation plan can provide the retirement income benefits that executives need. When properly designed, these plans defer income taxation to executives until retirement benefits are paid. As a nonqualified plan, these retirement benefits can only be provided to a select group of your managers and highly compensated employees.

Deferred compensation plans are usually designed as a pure supplemental retirement benefit provided by an employer. These plans are also known as Supplemental Executive Retirement Plans or "SERPs" and are more common than salary or bonus deferral plans.

Permanent life insurance is an excellent choice to "informally fund" your company's benefit obligations. As a business asset, life insurance policy cash values and death benefits can be used to meet any other business needs.

Key Employee Retention -
Deferred compensation encourages executives to stay with your company.

Selectivity and Choice -
With a nonqualified plan, your business decides which executives are included in your plan and their level of benefits. Plans may be tailored to meet the needs of your business and its executives.

Cost-Effectiveness -
Business life insurance is a cost-effective tool to accumulate cash values and death benefits for your funding needs.

Retirement Income -
Increased retirement benefits eliminate a significant financial worry for your executives.

Tax Advantages -
Deferred compensation benefits are not subject to income taxation until retirement.

Family Protection -
If an executive dies before retirement, many deferred compensation plans are designed with significant pre-retirement benefits.