NonQualified Benefit Plan Examples

Benefit Securitization Strategies

To avoid current taxation, most nonqualified compensation arrangements are merely unsecured promises to pay. While executives understandably want to avoid current taxation, they also want the assurance that their deferred compensation ultimately will be protected from the following risks:

• Change of management,
• Change of control,
• Change of heart and
• Insolvency.

In order to accommodate these two competing and somewhat inconsistent interests, several different devices are available that offer executives varying levels of protection from the risks that might reduce or eliminate an employer's ability and/or willingness to pay out benefits. These devices include:

• Rabbi Trusts,
• Secular Trusts,
• Escrow Accounts,
• Life Insurance and
• Annuity Contracts.

The professionals of The Cochlan Group can help you determine which securitization strategy makes the most sense for your situation and will design and help implement the strategy in a plan tailored specifically to your needs. Contact The Cochlan Group.