Does your executive benefits package meet the needs of your leaders? Do your executive benefits packages stand out from other organizations? If not, we suggest reevaluating and finding ways to improve your current executive compensation packages. Here is how to think strategically about your executive benefits package.
Never Assume that Your Executive Benefits Package is “Good to Go.”
Many organizations believe they have the best benefits package, which isn’t always the case. How do you know that there needs to be an improvement?
Well, we suggest that you ask yourself these critical questions:
- Does my 401(k) plan only replace a small percentage of my top executives’ incomes?
- Will disability coverage offer enough if one of my executives becomes disabled?
- Will my executives likely have to work past retirement because they can’t afford to live off social security and their 401(k) alone?
Understanding that Regular Employee Benefits Packages Operate Differently
Each one of your employees deserves a comprehensive benefits package. Your retirement plans and group coverage might be superior for entry-level employees or employees who don’t hold leadership roles or aren’t “key people.” However, regular employee benefits packages typically fall short for high-earning executives. The downside to not adding value to your executive benefits package is putting your organization at risk of not attracting top executive talent.
How to Improve Your Executive Benefits Package
Here are some ways to ensure that your benefits package is superb for the key players at your company.
Add Money on Top of Retirement Plans
One of the best ways to enhance an executive’s retirement is through a nonqualified defined contribution (NQDC) or defined benefit plans that supplement qualified policies. The first option allows an executive to contribute a percentage of their salary annually. At the same time, the business can offer a voluntary NQDC plan in which the executive can contribute pre-taxed compensation to build supplemental wealth for retirement. The executive won’t have to pay taxes until they receive distributions, typically post-retirement.
Investing in Add-Ons to Disability Insurance
Executives are high-earners and often the breadwinners of their families. Therefore, sometimes group disability insurance doesn’t cut it. After all, most disability plans only give policyholders 60% of their income. Plus, injuries happen on a job more often than people consider. According to the Council for Disability Awareness, one in four of today’s twenty-year-olds will become disabled by retirement, with the average long-term disability putting employees out of commission for nearly two years.
However, as a business owner or leader in a company, there are other things to consider, such as how to run payroll and keep up with business expenses while recovering. For that reason, disability insurance coupled with business overhead insurance is a must.
Adding a Key Person Life Insurance Policy into the Mix
Executives, just like regular employees, need a life insurance policy. However, high-earning employees need high levels of coverage, which call for specialized underwriting. Enter key person life insurance. Your execs will feel secure knowing their families will be financially sound if they pass and feel reassured that they can offset direct financial losses.
These are only three of the many ways that you can offer your leaders the best benefits packages. Do you need a qualified broker to review many policies and options in a language you can understand? If so, reach out to Malden Solutions today.
Partner with Malden Solutions Today
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.