As a business owner, you know your company is as strong as the employees who work for you. It’s up to you keep them feeling rewarded and appreciated by offering the right key employee benefits.
Key Person Benefits Categories:
1. Business succession planning
A business succession plan helps you transfer ownership and management of your business in the event of your death, retirement or disability.
Ensure the continuation of your business
Plan ahead and avoid a business interruption or forced sale. A solid business succession plan may:
- Ensure the remaining partners have the necessary funds to buy your interest in the business
- Ensure a potential buyer is lined up ahead of time
- Provide a deceased partner’s family with the funds they might need
The plan can set the price of each owner’s interest in the business and ensure that money will be available to transfer ownership of this interest and potentially provide a decease owner’s family with necessary funds.
Types of business succession plans:
- Buy/sell agreements – Buy/sell agreements are a succession planning tool that keeps a company running “business as usual” in the event of an owner’s death, disability or retirement.
- Key person insurance – Help cover financial losses in the event of a key business contributor’s death.
2. Employee retention
Reward and retain your top employees.
As a business owner, it’s to your benefit to keep your top employees feeling rewarded and appreciated. Showing your employees that you recognize their value is a key factor in employee retention. And with the high cost and time investment involved in recruiting and training new talent, developing employee retention strategies is more important to the success of your business than ever.
Nationwide can help you implement life insurance policies using a variety of strategies that benefit your business by helping to retain your key employees. Employer-owned or employed-owned policy strategies are available.
Make life insurance part of your employee retention strategy
3. Supplemental retirement
Give your top employees an opportunity to save more for retirement.
Another option once key employees max out their qualified plan
Even if you already offer a traditional 401(k) plan, you may want to give your key employees a little more incentive to stay with your business. A supplemental retirement plan gives your top employees a chance to save more once they’ve maxed out their contribution to a qualified plan, which can increase engagement and retention.
As the employer, you’ll have the flexibility to choose either a fixed-dollar benefit amount or a formula-based benefit amount for your employees, based on participant compensation and/or years of service. You can also design the plan to provide reduced benefits if the employee separates from service before retirement age. You can even match employee contributions for additional tax breaks and more of a reward.
Supplemental retirement strategies
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