Supplemental Executive Retirement Plan Design and Compliance

Summary

This practice note discusses supplemental executive retirement plans (SERPs), a common form of ''top hat'' plan intended to provide key executives with enhanced retirement benefits. SERPs are one type of nonqualified deferred compensation (NQDC) plan, often supplementing retirement benefits provided under a separate broad-based tax-qualified defined benefit pension or defined contribution plan also sponsored by the employer. SERPs and other top hat plans are exempt from many of the requirements and limitations applicable to other benefit plans under the Employee Retirement Income Security Act (ERISA) and to qualified retirement plans specifically under the Internal Revenue Code.