knowledge topics
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.
- Employer
- Beneficiary
- Trustee
- 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.
Glossary of Verbs (mouse over to see definition)
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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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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 judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
