Deferred Compensation Plan: Employer Benefits

• Provides income tax-free death benefit and accumulates tax-deferred cash value for the employer
• Employer can use accumulated net cash value to pay the deferred compensation (through withdrawals or policy loans)
• Minimal ERISA requirements (provided only a select group of management or highly-compensated employees are covered)
• Provides select employees with additional deferral opportunities different from those available to other employees
• Helps recruit, retain, and reward talented staff
• Income tax deductions for benefits payment
• Each agreement can be tailored to an individual employee
• If the employee leaves, the company can recover the premiums paid by surrendering the policy or can continue to hold the policy

Related Terms: Deferred Compensation Plan, Deferred Compensation Plan: Employee Benefits