Executive Benefit Plans
In today’s competitive business environment, key executives are one of your company’s most valuable assets. Competition to recruit, retain and reward top performers has grown to the point that traditional compensation methods are not enough.
Top executives are seeking ways to cope with tax issues and retirement needs amid restrictive legislation that dramatically limits the amount of income that can be deferred or contributed to the company’s qualified retirement plan. These executives are seeking wealth-building opportunities.
For this reason, a growing number of companies are turning to nonqualified deferred compensation arrangements, split dollar plans, phantom stock plans, and golden handcuffs to augment their key executives’ retirement benefits packages and overcome many of the regulatory restrictions that apply to qualified retirement plans.
Objective Advice and Advocacy
As professionals with many years of experience in executive compensation strategies, our role is to serve as your company’s advocate—helping you define your specifications and compare existing programs with your current goals. We help you orchestrate the plan; assemble the required specialists; coordinate arrangements with your legal, accounting and internal advisors; and guide every aspect of your plan’s development.
Protecting a Business Partnership
Buy-Sell agreements are intended to help protect the Business Owner’s relationships and rights during the significant events that might happen during his or her career. Most commonly, buy-sell agreements are put in place to protect the family of an owner if a partner dies, is debilitated or decides to exit or retire, while allowing the remaining owners to move the business forward.
Proper Funding Is Essential to the Agreement’s Effectiveness
It is important to document the desired outcome, but it is also critical to manage the written document and proactively allocate funds in a strategic manner. It is very possible to leverage the funds that are allocated so that they are able to be utilized by more than one of the buy-sell triggers. The Reichert Company can guide you in the process of developing and funding a buy-sell agreement suited to the needs of your business.
Key Person Insurance
Protecting Your Business Against Loss of Key Employees
The death of a key person can result in serious consequences for the business. Credit could be substantially impaired, or even worse, loans would be called if the key person was a co-signer. The loss of that “intangible asset value” represented by the key person may be greater than that caused by a fire, flood, or other catastrophe.
When insuring a loss through death, Key Person Life Insurance can provide an important source of revenue replacement. Further, the insurance can be designed to accumulate reserves that may be used ultimately for retirement, a termination replacement, or the retraining of successors.
Split Dollar Plans
Many companies design their Key Person coverage as a Split Dollar Plan which has the potential for enhanced tax treatment under the 2017 Tax Act. This is an arrangement between an employer and an employee to share the costs and benefits of a life insurance policy. These plans are widely used in gift and estate planning and can be an important part of the compensation package for key executives.