The business insurance pros at NSI can help you examine the important tax advantages to both the employer and employee benefit plans. While Executive Benefits provide important tax advantages to both the employer and employee, the tax treatment is generally not as favorable as it is with Qualified Retirement Plans. Executive Benefits are not, however, subject to the strict rules governing Qualified Retirement Plans.
There are two basic types of qualified retirement plans:
Elective Deferred Compensation Plan (EDC):
With this plan an employee accumulates savings by deferring a portion of pre-tax salary until his or her death or retirement.
Supplemental Executive Retirement Plan (SERP)
With this arrangement, the business agrees to pay an additional amount upon death or retirement, above and beyond the elective amount accumulated by an employee.
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