In order to compete for talent, banks use supplemental executive retirement plans (SERPs) to attract and retain select employees.
Traditional bank SERP designs have their challenges:
- SERP is a liability/expense to the bank
- Benefit is taxable to the participant
- Participants benefit is subject to banks insolvency or regulatory takeover
- Executives personal net worth and retirement is too heavily concentrated in the bank
- Plan subject to 409(A) and 280(g)
- Liability is often offset by BOLI, which has many advantages, but by design is a MEC (Modified Endowment Contract), making it subject to taxes and penalties, limiting the banks ability to access cash value.
- Cost recovery from BOLI death benefit
Why consider the Platinum Security Plan©?
- Plan is an asset of the bank, not a liability
- Benefit can be non-taxable to the participant
- Participants money is protected by law
- Participants money is with a highly rated insurance carrier, not the bank
- Plan not subject to 409(A), 280(g) and Reg. O
- Policy designed as NON-MEC, allowing bank as policy owner to access a portion of the cash value without taxation and no penalty
- Cost recovery can be at participants retirement or from death benefit
- Plan is not considered a Top Hat plan, so not limited to just the highly compensated of the bank
- Can be offered to board of directors and even branch managers
- Simple plan administration and reporting
