Supplemental Executive Retirement Plan (SERP)

A Supplemental Executive Retirement Plan (SERP) is a defined benefit plan sponsored by an employer to provide additional retirement benefits to select employees. SERPs are often used to supplement the benefits provided by a company's 401(k) plan or other retirement savings plan.

SERPs are typically funded by the employer, and the benefits are based on a formula that takes into account the employee's salary, years of service, and age at retirement. SERPs can provide a significant source of retirement income for employees, and they can be a valuable tool for employers to attract and retain top talent.

However, SERPs can also be expensive for employers to maintain, and they can be subject to a number of complex rules and regulations. As a result, it is important for employers to carefully consider the costs and benefits of offering a SERP before making a decision.

Here are some of the key features of SERPs:

• SERPs are defined benefit plans, which means that the benefits are guaranteed by the employer.
• SERPs are typically funded by the employer, although employees may be required to make contributions.
• The benefits of a SERP are based on a formula that takes into account the employee's salary, years of service, and age at retirement.
• SERPs can provide a significant source of retirement income for employees.
• SERPs can be a valuable tool for employers to attract and retain top talent.
• SERPs can be expensive for employers to maintain.
• SERPs are subject to a number of complex rules and regulations.

If you are considering offering a SERP to your employees, it is important to speak with a qualified financial advisor to learn more about the benefits and risks involved.