MKA Executive Planners Blog

Senior executives and professionals in both the not-for-profit and taxable sectors have a problem that most people would envy. Where do they put savings above qualified retirement plan limits? They can’t qualify for a traditional or Roth IRA as an individual taxpayer. Employer sponsored deferral and savings vehicles are subject to regulations that make them restrictive, inflexible, public and insecure, e.g. the executive’s savings may be exposed to creditors of his or her employer. Plus, they can’t access the money easily should they need it.

After tax supplemental compensation plans funded with life insurance offer a hybrid arrangement that reduces the complexity and expense associated with non-qualified deferred compensation plan. These plans are a great benefit for a company to offer to non-owner key executives to retain and reward them for their valuable services. They are especially attractive in pass through entities such as Subchapter S corporations and tax exempt organizations.