Supplemental Executive Retirement Plan (SERP)
KNOWLEDGE EXPECTED OF: CFP® Professionals
Highest Knowledge Level: Understanding
Knowledge Levels and Associated Verbs
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Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
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Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
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Application
Ability to put information to use / to use knowledge for relevant, practical purposes
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Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Determine
To ascertain / to come to a decision, such as by investigation or reasoning
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
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Hold cursor over or click on each term to read its definition.
Additional Knowledge Expected of CFP Professionals
- Define a supplemental executive retirement plan.
- Identify the purpose for which a supplemental executive retirement plan may be used.
- Identify the methods for funding a supplemental executive retirement plan, such as:
- Employer contributions
- Retirement Compensation Agreement
- Letter of credit
- Insurance arrangement
- Explain the advantages of a supplemental executive retirement plan, such as:
- Larger retirement income over what may be provided by a pension plan alone
- Potential for annual contributions to exceed that of allowable Registered Retirement Savings Plan limits
- Creditor protection
- Define the parties to a supplemental executive retirement plan.
- Employer
- Beneficiary
- Trustee
- Explain how income received from a supplemental executive retirement plan by the beneficiary is treated for tax purposes.
- Explain the treatment of a supplemental executive retirement plan upon death.
- For the supplemental executive retirement plan member
- For the supplemental executive retirement plan member’s spouse
