A supplemental savings investment plan is a form of deferred compensation plan in which some of key executives and employees are able to defer their compensation by the amount the equal to excess of threshold limit as per 401(k) annual limit Normally the amount deferred under this scheme are invested in number of mutual funds available under this plan and are credited with earnings as per returns of these mutual funds.
The amount of funds deferred in each year is then credited to the employee in installments over a period of five to ten years as chosen and specified by the individual concerned. In case of death of the participant before the retirement the funds are credited in lump sum in favor of the nominated beneficiary. Thisis a voluntary savings scheme targeting the retirement corpus of the individual and the amount to be deferred under this scheme is entirely the individual executive’s prerogative.
[Also Read: Supplemental Savings plan]
Sample for Supplemental Savings Plan
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