Supplemental Executive Retirement Plans, called SERPs for short, are used to restore benefits that executives lose due to qualified pension plan limits - or to simply provide extra retirement income. SERP financing tools can help your organization to:

Provide extra retirement benefits

Most employee retirement benefits are provided through qualified pension plans. These plans have tax and benefit security advantages, but they also have restrictions like benefit maximums. When executive compensation exceeds those limits, benefits are capped. Typically, that means executive pensions fall short of the income replacement ratios that the company intended - and the executive needs.

Non-qualified Supplemental Executive Retirement Plans (SERPs) are specifically designed to overcome the basic pension plan limitations. For example, they can provide extra benefits for things that the qualified pension plan doesn't cover including:

Plus, SERPs can be used to simply provide extra retirement income over and above what the basic qualified plan provides. But what SERPs can't do is offer the same tax and benefit security advantages as qualified plans. So it's important to finance them wisely - to protect both benefit security for participants and the company's bottom line.