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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