Key Points
- When it comes to a key executive’s retirement income, well-planned compensation ensures that they don’t put all their eggs in one basket.
- Bank‑Owned Life Insurance (BOLI) is one way to diversify retirement income. BOLI creates a tax-advantaged increase in bank income while also creating long-term assets for key executives.
- There is likely no stronger emotional pull than being offered a lifetime benefit. At Newcleus, we created LINQS+, our Lifetime Income Non-Qualified Solution, to entice, hire, and retain the top talent in the banking field.
The key to a successful retirement is having the funds to enjoy your life the way you want… without monetary stress. Key employees in banks and credit unions have their own portfolios set up to fund retirement, but will that be enough? Having crucial conversations with key executives about their retirement planning can lead to strategic compensation discussions around deferred benefits in their many forms.
Boards are often in the position to approve compensation packages for long-standing employees. Addressing those executives’ retirement goals and delving into their expectations can help set the right levels of deferred compensation.
A Diverse Portfolio Reduces Risk
Wealth managers know not to put all of a clients’ eggs in one basket and compensation advisors are the first to offer creative and strategic ways to ensure that key executives are at the lowest possible risk while gaining the best possible long-term benefits post-retirement.
It’s Not Just About You
In addition to retirement income, compensation can include death benefits for families to ensure the health, happiness, and financial safety of their loved ones once they pass on.
Why Bank-Owned Life Insurance offers the kind of diversification key executives AND boards of directors love
Bank‑Owned Life Insurance (BOLI), creates a tax-advantaged increase in bank income while creating long-term assets for key executives. The income from a BOLI plan can be made available to fund Supplemental Executive Retirement Plan (SERPs) or other employee benefits.
BOLI can be leveraged to provide key executives with supplemental life insurance coverage and/or a tax-free SERP benefit to the executive’s beneficiary ensuring their loved ones receive the benefits after they pass.
What if you could guarantee retirement benefits for the REST of your key executive’s life? It’s not a trick.
At Newcleus, all we focus on is creating diverse alternative options to help banks put their money to use to benefit their account holders, its key executives, and its tax liabilities. As such, we have detailed insight into the ways in which SERPs can benefit compensation plans. While SERPs are tremendously valuable, we felt we could do better.
So, we created a Lifetime Income Non-Qualified Solution (LINQS+). LINQS+ is a strategy that can be used to provide lifetime benefits at significantly lower costs to the bank over the lifetime of an employee.
A lifetime benefit can be an extremely valuable component of an executive retirement plan that is meant to entice, hire, and retain the top talent in the banking field. There are very few benefits that have as strong or as emotional of a response as our LINQS+ plans. Lifetime benefits take into account that our lifespans have increased due to the advances in medicine and how this may impact our quality of life by adding 10 or more years on to the end of life.
The Newcleus Difference
Our expertise is in plan design that not only benefits banks by taking under-utilized funds and investing them wisely in lower risk – higher yield investments, like BOLI, but offset tax liabilities and creates opportunities for additional employee benefit spending to attract and retain top talent.
With our dedicated compensation advisory, not only can we help create comp plans that perform, but we also collaborate with CFOs and Boards of Directors to address key investment opportunities only available to banks whose advisory has the expertise and experience to take advantage of alternative investment opportunities in the insurance space.
Our reporting helps boards of directors to communicate past decisions to new members and to new executives as they join the bank or credit union’s executive team. This eliminates months of questioning why certain packages were chosen and provide a clear and logical outline of all the key factors that informed the packages, investments, and choices the current board and C-Suite have made.
Contact Newcleus today to get more information about our compensation advisory services.