What are the disadvantages of a supplemental executive retirement plan?

ANSWER

The BIDaWIZ Team's Answer:

There are disadvantages for both the company administering the plan as well as the plan participant. The company doesn't obtain an immediate tax deduction on the premiums as is the case for other plans. They can only deduct payments when the plan participant is paid. The main disadvantages for the participant are as follows: 1) the plan isn't insulated from company credit claims, 2) the participant has little control over adverse tax situations, 3) exposure to policy performance/investment risk, & 4) high insurance requirements.