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Employer Sponsored Retirement Plans

Many employers sponsor some type of benefit to provide a source of retirement income for their employees. There are two broad types of retirement plans: Qualified Plans and Non-Qualified Plans.

Qualified Plans are the traditional retirement plans that most employers and employees are accustom. Qualified Plans are subject to ERISA and are either Defined Benefit Plans (e.g. final average pay, cash-balance pension plan) or Defined Contribution Plans (e.g. profit sharing, 401k). They typically cover all of the employees regardless of salary, years of service or age.

Non-Qualified Plans pick up where Qualified Plans leave off, providing for both supplemental employer-provided benefits and enhanced income deferral opportunities. These plans are becoming increasingly popular due to the flexibility in plan design and administration and more employers are relying on Non-Qualified Plans to help their highly paid employees cope with tax issues and retirement needs. Utilizing these plans may help employers in the Recruitment, Retention, and Rewarding of key executives and employees. Employers may gain flexibility in the design of a compensation package for their employees by using Non-Qualified Plans.

A well designed Non-Qualified Plan offers unparalleled flexibility and, unlike traditional Qualified Plans, these plans enable you to:

  •  Choose who participates as well as their level of participation without worrying about meeting complicated discrimination tests,

  •  Design and implement a plan as you see fit with few limitations and reporting requirements,

  •  Fund the plan through the organization, participating executives, or both

  •  Incorporate retirement life insurance benefits, pre-and post-retirement life insurance and disability benefits in one plan, and

  •  Potentially avoid many of the statutes and regulations that restrict the design and operation of Qualified Plans.

Well designed and funded Qualified and Non-Qualified Plans can provide you and your employees with the cornerstone of a sound financial future.

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