Since the US presidential election in November, banks are signaling higher overall confidence. As profits rise and optimism grows around regulatory relief, they are feeling the pressure to stabilize management and retain executives.
Though many banks were able to sustain salaries and qualified plans during the recession, most non-qualified plans were terminated or not enacted. SERPs or Supplemental Executive Retirement Plans are some of the most common non-qualified plans, and now they’re seeing a comeback.
Retirement: SERPs allow companies to provide additional benefits to supplement the traditional qualified plans which have limits. This allows companies to provide better benefits to key executives.
Retention: SERPs lack the restrictions that qualified plans have, so banks have the flexibility to structure them in a way that keeps executives from risking their benefits by leaving.
Reward: SERPs can be valued based on performance measures which allows banks to incentivize good performance.
Recruit: SERP plans can help banks attract new talent as an added bonus to a benefits package.
SERPs are on the rise as a practical solution for benefits packages. It’s important to note that SERPs are unsecured promises to pay on behalf of the banks; although they can be strengthened by a bank owned life insurance to offset the SERP accrual.
Are you looking to hire top banking talent? Contact the Rhonemus Group to discuss your options. CEO Brian Rhonemus has nearly 30 years experience in the banking industry which gives him a keen ability to identify top candidates who become stellar performers for his client companies.