Key Person Plan Design
Attracting a high-caliber workforce is essential to the success of privately owned businesses. If you’re recruiting talent at a strong clip, an excellent next step to keeping those individuals in your company is a defined contribution plan. And for those critical employees who may be in line to ultimately run your business when you step aside, a key person plan design is an enticing offering.
Put simply, having the right benefits in the form of a key person plan design helps you retain top talent. These customizable packages offer advantages such as:
- Helping key employees recoup for benefits lost due to limits on qualified retirement plans
- Assisting them in saving a larger amount to supplement Social Security in retirement
- Providing performance-based incentives to help ensure loyalty to your organization
- Bonus plans, split-dollar plans and deferred compensation
- Added savings and long-term income diversification possibilities
Put simply, having the right benefits in the form of a key person plan design helps you retain top talent. These customizable packages offer advantages such as:
- Helping key employees recoup for benefits lost due to limits on qualified retirement plans
- Assisting them in saving a larger amount to supplement Social Security in retirement
- Providing performance-based incentives to help ensure loyalty to your organization
- Bonus plans, split-dollar plans and deferred compensation
- Added savings and long-term income diversification possibilities
A 401(k) plan on its own may not meet the long-term needs of key employees due to limitations and regulations. Supplementing it with a cash balance defined benefit plan or a non-qualified plan could be the ticket to ensuring your key employees don’t leave for a competitor.
While a tailored key person plan design helps your best secure their financial futures, it also protects your business. A potential successor’s severe illness, exit with minimal notice or death could be a catastrophic blow to your company. Omnia Executive offers the following options to provide necessary funding and peace of mind should the unexpected occur with a key employee:
- Life insurance
- Replacement disability insurance
- ESOP repurchase plans
- Overhead expense insurance
For both life insurance and replacement disability insurance, the business is the owner and beneficiary and will receive tax-free funds to help with the loss. An owner could also choose to take the tax-free death benefit and discontinue operations. This coverage provides stability when you need it most, helping mitigate lost revenue.
Designing a defined contribution or key person plan — and determining how to pay for and administer it — doesn’t have to be a daunting task. Omnia will walk you through the process, helping you design, implement and finance your selection. We’ll answer questions you have tied to vesting options or when benefits should get paid while keeping up on any legislative changes.
For both life insurance and replacement disability insurance, the business is the owner and beneficiary and will receive tax-free funds to help with the loss. An owner could also choose to take the tax-free death benefit and discontinue operations. This coverage provides stability when you need it most, helping mitigate lost revenue.
Designing a defined contribution or key person plan — and determining how to pay for and administer it — doesn’t have to be a daunting task. Omnia will walk you through the process, helping you design, implement and finance your selection. We’ll answer questions you have tied to vesting options or when benefits should get paid while keeping up on any legislative changes.
The right benefits make a big difference. Omnia is at the ready to serve you and your employees throughout the lifetime of your business’s plan. Recruit great employees and retain them with a competitive benefits package. Let us show you how.
