American Benefit Corporation
Salary Continuation Plans American Benefit Corporation specializes in developing strategic solutions to executive benefit needs.
At American Benefit Corporation, we design, fund and manage executive non-qualified benefit plans for highly compensated corporate executives who wish to reduce current income taxes and form personal capital on a tax efficient basis. Established more than 30 years ago, we serve the unique needs of executives in numerous corporations with their personal capital formation objectives.
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American Benefit Corporation and its representatives are presently licensed to operate in particular states of jurisdiction and may operate only where licensed and, with regard to any particular product, where that product has been approved. American Benefit Corporation and/or James W. Herlihy are currently licensed to market insurance and investment products in Arizona, Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Vermont.
The insurance and/or investment product information on this site is not intended for distribution or use in any states or jurisdictions where our company, its products, or representatives are not so licensed or approved.
Securities offered through M Holdings Securities, Inc. A Registered Broker/Dealer, member FINRA/SIPC. American Benefit Corporation is independently owned and operated.
American Benefit Corporation is a member of M Financial Group. Please go to www.mfin.com/DisclosureStatement for further details regarding this relationship.
Featured Case Study
Reduce Turnover With Corporate Match
A large east coast grocery store chain employed pharmacists in each of their stores. They were experiencing 40% turnover each year within this group and wanted a benefit plan that would increase their retention.
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Salary Continuation Plan
A salary continuation plan is a corporate sponsored benefit generally designed to replace an executive's income in the event of his/her death, retirement or disability. The benefit plan is exempt from ERISA and must be confined to a select group of highly compensated people. Because it is exempt from ERISA and is a non-qualified benefit, the company may decide which executives participate and the level of their benefit. For example, the CEO might have 100% of his/her salary replaced by the plan while other executives may have a smaller percentage of their income replaced. In addition, the company may have a "years of service" requirement before the executive is eligible for the benefit. This type of benefit, as opposed to a deferred compensation plan, is fully funded by the company.
A plan begins with a written agreement (Plan Document) outlining the provisions of the plan including how the participating executive qualifies for a benefit. The advantages to the company of establishing a salary continuation plan are:
1) It's simplicity and ease of administration;
2) They assist in the attraction and retention of key executives;
3) They are flexible, allowing for different benefit levels and vesting schedules;
4) With life insurance, company plan costs can be recovered.
Some of the benefits to executives are:
1) Personal financial security;
2) Benefit amounts can be negotiated with the employer;
3) Acts as a supplement to the 401(k) plan for retirement.
Corporate owned life insurance (COLI) is an excellent way to fund a salary continuation death and retirement benefit. The cash value grows tax-free on the corporate balance sheet and can be used to pay the retirement benefit. An individual supplemental disability policy is then used to fund the disability benefit that cannot be funded by the group long term disability plan.
Securities offered through M Holdings Securities, Inc., a Registered Broker/Dealer, Member FINRA/SIPC. American Benefit Corporation is independently owned and operated.