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Deferred Compensation is an incentive plan that allows an employer to provide
select employees (including stockholder employees) compensation at a future
pre-selected date (retirement, severance, or disability) for services the
employee renders on a current basis. The plan is ideal for these reasons:
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Key employees are attracted and retained.
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Employer can select key individuals without providing for the entire employee
group.
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Government approval is not required.
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Plan benefits will not be taxed to the employee until actually received.
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Employer can recover cost for delay of tax deduction until benefits are paid to
employee.
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Additional Advantages to the Employer
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Supplement or alternative to qualified retirement plan.
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Promotes loyalty and goodwill from non-owner employees.
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Benefits custom designed for each participant.
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Employer retains full control of funding.
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Insurance can provide funds when needed to pay benefits.
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Additional Advantages to the Employee
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Amounts of deferred income accumulate tax-free.
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Family can receive benefits at death or employee can receive benefits if
disabled.
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No publicity required.
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A supplement to other sources of retirement income.
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