While there are many different vehicles to enhance employee retention, a great and cost effective way to retain key employees can be an executive benefit plan. Offer key personnel a meaningful executive benefit plan that encourages them to stay with the business while offering some of value that now.
Executive Benefit Plan Case Study
A business owner wanted to retain a key employee for the next 10-15 years using an executive benefit plan. What kind of benefit is meaningful and encourages the employee to stay with the business for some period of time, yet offers something of value to the executive now?
Navigant implemented an Executive Reward plan that avoids the complexities of complying with Internal Revenue Code Section 409A and still provides a self-completing executive benefit plan that ties the executive to the business.
$400,000 bonus in 15 years for key employee (deductible to business)
$0 Net Cost to the Employer if employee leaves during the 15 years
$500,000 Death Benefit for beneficiaries of the key employee
$0 Net Cost to the Employer if employee dies prematurely