Key Associate Retention
KAR #1 – Key Person (or all Employee) Supplemental Long Term Disability (LTD) Coverage Paid Upfront as a One Time Lump Sum
Most executives already have group and / or personal LTD coverage but may have a need for upfront cash in the event of a total disability so as to cover more immediate expenses resulting from the disability. This LTD coverage, underwritten by an A-rated carrier provides for an immediate lump sum payment of up to 100% of salary with a maximum one-time payment of $100,000. Premium rates are based on age, sex, smoking habits and can be as low 50% of typical LTD rates because the amount and duration of the benefit are fixed. “Accept-or-Reject” style underwriting is based on information found at MIB and Script Checks and the benefit is payable for a total disability that prevents an insured from performing any occupation for which s/he is reasonably suited for based on training, education or experience. Other terms and conditions apply as can be found in the insurer’s materials.
KAR #2 - ObamaCare-Excepted, Fully-Insured Supplemental Executive Medical Reimbursement Plan
Every advisory firm has a select group of employees who share major responsibility for the firm’s success and who must be retained and engaged in the business. This supplemental Executive Medical Reimbursement Plan (EMRP) is an PPACA “excepted benefit” that sits outside of the Health Care Reform group plan provisions so it can be carved out for select employee classes. The EMRP reimburses out-of-pocket expenses for in and out of network healthcare, Rx, dental, vision, and most other IRC Section 213(d) eligible expenses. It also includes Clinical Support services and 24/7 Travel and Medical Emergency Support Services, including air evacuations. Benefits may be non-taxable to the plan member and premiums may be a deductible business expense for the employer. (This is not local, state or federal tax advice. Please seek counsel of a professional tax advisor)
KAR # 3 - Money Back Guarantee Long Term Care (LTC) Insurance Paid in 5 Installments to Aid in Key Employee Retention
A major concern with an LTC benefit is the use-it-or-lose-it feature where under the purchaser may never realize a dollar benefit from paid premiums. Here instead, the executive purchaser or the employer purchaser on the executive’s behalf (perhaps under an IRC 162 bonus plan) pays either 5 annual premiums or a lump sum premium. 100% of premiums are guaranteed to be returned to the policy beneficiary via payment of 100% of LTC expenses up to the policy maximum and / or as an income tax-free death benefit and /or via an unfettered cash withdrawal provision or combinations thereof. If paid by the advisory firm on the executive’s behalf over 5 years, this LTC policy can aid in key employee retention
Note: Other more traditional retention ideas can also be made available like executive supplemental retirement and savings plans