Key employees of companies such as executives may have additional types of retirement plan to help them maintain their lifestyles in retirement.
This plan is a type of deferred compensation plan to retain and reward key executives. They are non-qualified, and the company can deduct the benefits when they are paid. SERPs are customizable to the executive’s needs.
An ESOP is a qualified defined-contribution employee benefit plan that allows employees to invest in the company they work for by owning investments in stocks or mutual funds. These investments can be purchased directly, given as a bonus, obtained through stock options, or vested through a profit-sharing plan.