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Executive Planning

Attract high-quality talent and retain your best employees.

There is so much more to employee benefits than healthcare and retirement plans.

 

Isn't it time your business works as hard for you as you work for it?

As a business owner, you need to ask yourself the following questions when it comes to attracting and retaining your best employees:

 

  • Do you have the right retirement plan(s) in place?

    • Two or three are better than one!

 

  • Have you maxed out the tax-deductible benefits that are allowed?

    • If you can pay for something pre-tax it might be better for you.

 

  • Are you taking advantage of all the tax deductions, that are available to you?

    • Taxes are probably one of your biggest expenses. Minimizing these in a way that benefits you as the business owner, your executives or employees, may enable yoru business to grow even faster. 

 

This is where executive planning plays a vital role in your organization.
 

What is Executive Planning

Executive planning is the process of creating benefit plans for key executives or directors of your company that go above and beyond what traditional plans provide.

 

Specifically, in the world of employee compensation and benefit plans, there are largely two options available.

 

Qualified Plans

Qualified Plans are tax-deferred retirement plans such as 401(k) plans, Keogh plans, and profit-sharing plans, which meet the Employee Retirement Income Security Act (ERISA) requirements.

 

These plans must be offered to a specific number of employees who meet minimal threshold requirements. They cannot be tied to performance or business metrics, and both employers and employees are limited in how much they can contribute to them.

 

Non-Qualified Plans

The second major category of employee compensation plans is ‘non-qualified plans. These are specifically designed to provide management and senior executives higher levels of compensation specifically based on their actual performance and responsibilities.

 

Unlike qualified plans, non-qualified plans do not have a specific dollar limit and can be rewarded based on the achievements in underlying business income, customer retention, and more.

 

Executive planning is the process of selecting the unique mix of qualified plans and non-qualified plans that will work best to incentivize your employees. 

 

The Benefits of Executive Planning

The main benefit to executing planning is it enables your company to attract and retain key people, in what is today, a very competitive landscape.

 

A recent survey revealed that 67 percent of recruiters (Source: Monster Inc 2018 Recruiting Survey) said their biggest challenge was finding highly skilled and qualified candidates.

 

Furthermore, since the onset of COVID-19, employees feel it is important that employers offer financial wellness benefits and packages. (Source: Lincoln Financial Group Survey)

 

Executive planning provides a myriad of benefits to your company, which could include:

 

  • Attracting quality, high-caliber talent

  • Staying competitive

  • Solidifying a company culture around performance

  • Boosting employee morale

  • Retaining people longer

  • Increasing your bottom line

 

Undoubtedly, executive planning is a powerful and essential tool to build the best team for your business.

 

Types of Executive Plans

The good news is companies have many options when it comes to putting an executive plan together.

 

They can be designed to defer compensation already earned; to provide insurance benefits in the event of death or disability; to supplement retirement income above traditional benefits plans; and much more.

 

These plans may include:

 

  • Nonqualified Deferred Compensation (NQDC) plans

  • Supplemental Executive Retirement Plans (SERPs)

  • Split-Dollar Life Insurance Plans

  • Executive Long-term Care Insurance Plans

  • Benefit Equalization Plans (BEPs)

  • Grantor Trusts (also known as Rabbi Trusts)

 

Because this list is by no means exhaustive, it’s key for companies to work very closely with the right certified financial professional to build out the ideal executive plan for them.

 

Creating an Executive Plan

The following are just a few questions you’ll need to answer in order to begin envisioning what an effective plan will look like for your company:

 

  • Who are you looking to reward with the executive plan?

  • What performance do you want to reward?

  • What company assets will fund the plan?

  • What do your major competitors offer?

  • Will you match or exceed that?

  • Which benefit vehicles does your company currently utilize?

  • Which benefit vehicles does your company want to utilize?

  • How does your company reward employee performance?

  • What specific benefit can executive planning bring to your company? 

 

Once you have defined the core intent of your executive plan, the next step is analyzing how the IRS limits are currently impacting each of your employees.

 

Because the tax code is frequently changing constantly, why not work with someone that can keep everything up to date so you can focus on running your business?
 
Frontier Wealth Strategies excels in helping companies design, implement, and administer executive plans that are cost-effective. Our professionals prioritize meeting executives’ and employees’ employee’s financial needs while assisting you to drive your business to new heights.