NON-QUALIFIED EXECUTIVE BENEFIT PLANS

In Recent years, Corporations have implemented Non-Qualified Plans to:
1. Entice the best leadership and technical talent to their companies,
2. Reward senior staff members for performance in a highly competitive environment,
3. Retain key employees from being lured away by the competition, and
4. Overcome the government limits imposed on Key Executive's participation in corporate pension and 410-(k) type plans.
5. Deferral of Stock Option Profits into a Non-Qualified Plan pre-tax (without taxes).

Companies have been forced to say to their executives-

The 3 CAN'TS:
  • We can't allow you to defer the desired amount of pre-tax compensation
    (LEGISLATIVE LIMITS).
  • We can't provide retirement income commensurate with your final salary
    (90-100% of final salary). Click here for explanation.
  • We can't provide an adequate level of Survivorship Benefits to protect your
    family (ERISA requirements). Click here for explanation.
 

PROBLEM

INEQUITY OF YOUR 401-(k) RETIREMENT PLAN


THE NEED FOR AN ADDITIONAL BENEFIT PLAN GROWS

AS COMPENSATION INCREASES

Example: Current Age - 45 - Retirement at Age - 65

  Admin Assist Mid-Level Manager Manager Director V.P./CFO President/ CEO
Current Salary $30,000 $50,000 $70,000 $100,000 $150,000 $200,000
401(K) Plan Deposit (10% of Comp.)1 3,000 5,000 7,000 10,500 10,500 10,500
Benefit at Age 65 From 401(k) Plan2 11,422 19,037 26,651 40,791 40,791 40,791
Social Security3 12,108 15,504 17,292 17,292 17,292 17,292
Total Retirement Benefits $23,530 $34,541 $43,944 $58,083 $58,083 $58,083
Percent of Salary at Retirement 78% 69% 63% 58% 39% 29%


1The maximum amount that can be deposited into a 401(k) plan for 2000 is $10,500.

2 Benefits from the 401(k) plan assume deposits increase by 8% annually and those benefits are based on a life annuity.

3 Social Security benefits are determined based on the 2000-benefit scale.

* Inequity in benefits begins at salary levels above $60,000.

The Problem

 

 

SOLUTION


INTRODUCING OUR 401-K SUPPLEMENTAL PLAN FOR THE CEO AND SELECT KEY EXECUTIVES

  Admin Assist Mid-Level Manager Manager Director V.P./CFO President/ CEO
Current Salary $30,000 $50,000 $70,000 $100,000 $150,000 $200,000
401(K) Plan Deposit (10% of Comp.)1 3,000 5,000 7,000 10,500 10,500 10,500
Benefit at Age 65 From 401(k) Plan2 11,422 19,037 26,651 40,791 40,791 40,791
Social Security3 12,108 15,504 17,292 17,292 17,292 17,292
Total Retirement Benefits $23,530 $34,541 $43,944 $58,083 $58,083 $58,083
Percent of Salary at Retirement 78% 69% 63% 58% 39% 29%

ourplan.bmp (8710 bytes) Average Annual Increase of Retirement Benefits Over Present Plan $15,556 $26,918 $69,170 $111,917
Total Retirement Benefits $59,500 $85,000 $127,000 $170,00
Percent of Salary at Retirement 85% 85% 85% 85%

In addition, our plan Attracts, Motivates, Rewards and Retains your Key Employees without the limitations and restrictions of your qualified plan. Please visit our website (http://gfc.pfyfn.com) for our complete capabilities (click under the Services Area).

solution.jpg (9108 bytes)

 

DEFERRED COMPENSATION ILLUSTRATED

Non-qualified Deferral Plan

 

Non-Qualified Plans allow companies to say to their executives

THE 3 CANS:
  • We can allow an unlimited amount of pre-tax compensation deferrals
  • We can restore the lost retirement benefits commensurate with your final
    salary
  • We can provide Supplemental Survivorship Benefits to protect your family

What are the basic NON-QUALIFIED Plans that can provide these added benefits?

  • Deferred Compensation
    • Elective Deferral / Supplemental 401-K Mirror Plan
    • Management Security Contract™
    • Joint Security Trust™
    • Leveraged Compensation Plan™
  • Supplemental Executive Retirement Plan (S.E.R.P.)
  • Group Term Carve-Out Plans
    • Split Dollar
    • 162 Bonus

Benefit Security Discussion Click here

Deferred Compensation vs. Outside Investment Comparison Analysis Click here

Client Resources DatabaseFor more information please visit our resource database.

 

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