A supplementae executive retirement plan or SERP is a form of non-qualified deferred compensation.
Since the planned is non-qualified, the employer has the ability to select who participate in the plan (i.e. they can choose to offer such a plan only to a select number of employees and do not have to make the offer to everyone).
Traditionally the plans are set up as additional retirement benefits to an employee who is highly coveted by the employer.
The plans are used as an incentive to keep certain key employees and disuade them from leaving the employer. The retirement benefits offered under the plan are only payable to the employee if he or she stays at the employer for a certain period of time, which can be a rather longer period of time.
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Since the planned is non-qualified, the employer has the ability to select who participate in the plan (i.e. they can choose to offer such a plan only to a select number of employees and do not have to make the offer to everyone).
Traditionally the plans are set up as additional retirement benefits to an employee who is highly coveted by the employer.
The plans are used as an incentive to keep certain key employees and disuade them from leaving the employer. The retirement benefits offered under the plan are only payable to the employee if he or she stays at the employer for a certain period of time, which can be a rather longer period of time.