Supplemental Executive Retirement Plan (SERP)
KNOWLEDGE EXPECTED OF: CFP® Professionals Only
- Define a supplemental executive retirement plan.
- Explain the purpose of a supplemental executive retirement plan.
- 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.
- Explain when contributions to a supplemental executive retirement plan may be tax deductible to the beneficiary.
- Explain how income received from a supplemental executive retirement plan by the beneficiary is treated for tax purposes.
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