Key Employee Benefit Plans, or Executive Benefit Plans is one of the easiest approaches to enhance a compensation package for key employees. As an employer, you can stand out from the competition by offering your top employees a compensation solution that is: Simple to implement, easy to understand, exclusive for your best employees, focused on wellness.
identifying those key employees — and developing a plan to protect your business against the possible cost of
losing them — can be a critical component of your overall business plan.
Would you like to offer a valuable benefit to select top employees that is cost-effective, simple to implement and administer, and encourages the employee to stay with the business long term? If so, you many want to consider an Executive Benefit Plan, Key Employee Benefit Plan, or a Restricted Endorsement Bonus Arrangement (REBA)
• A void in management
experience and leadership
• Disruptions in production
• Reduction in credit rating
• Reallocation of capital to
find and train a replacement
In a smaller or more closely
held business, the loss of a
key employee may have a
greater impact, since individual
employees often make a more
significant contribution to the
• Contributions are generally fully
• Arrangement does not have to be
prequalified by the IRS and can be
terminated without IRS approval.
• Employer chooses which employees
• Bonus amounts can be set
differently for each employee
• Can be used to attract and retain
• Employee owns policy not subject to
a vesting schedule
• Access to cash value accumulated
in the policy
• Beneficiaries generally receive the
insurance death benefit income
Keeping your employees more closely tied to you is about creating rewards that benefit them while incentivizing their loyalty to you. Employees are looking for ways to meet their family’s financial needs, protect their survivors in the event of a premature death, and to ensure their legacies.
One way to meet their needs, while keeping them tied to your business, may be through an Executive Bonus
Arrangement funded by life insurance.