A SERP is a non-qualified supplemental retirement plan that’s meant to enhance an executive’s retirement benefit. While a 401(k) and 457(b) have strict contribution limits, a SERP (457(f) or Split Dollar) is flexible in the amount that may be provided to the executive with no imposed limits.
A SERP makes sense for retaining and/or rewarding valuable executives. SERPs continue to grow in popularity as the war on talent continues to become more competitive. SERPs help credit unions and other non-profit boards ensure that their top executives succeed financially in retirement and are not wooed away to another institution.
SERPs allow organizations to successfully attract and retain key executives. Ultimately, SERPs are a tool that can be utilized to create predictable transitions from current to future leaders while ensuring long term business success and profitability by avoiding unexpected turnover.
