SERP COMPENSATION CALCULATOR
If at any one point in life between
1978 and 2002, you did make Class 1 National Insurance Contributions (NICs),
there are high chances that you need a launch out a SERPs claim.
According to Investopedia.com, a
Supplemental Executive Retirement Plan, SERP, is a non-qualified retirement
plan for key company employees such as the C-Suites that ensures their benefits
are above and beyond those covered in other retirement plans e.g. 401(k), IRA
or the non-qualified compensation plans.
Pluses of SERP Compensation
These viable compensation option
plans for firms looking for ways to maximize their key executive retirement
income enables firm controls their retirement plan. This SERPs enables firms to
book its annual expenses equal to present value of the future benefits payment
streams with no IRS approval and reduced reporting.
In this case, you can get a
tailor-made financial needs, you can have benefits accrue to you as an
executive’s with no current tax implications. Moreover, in case of the
executives contributions were funded by a cash value of a life insurance policy
then the next of kin will make SERP claims.
Any SERP Compensation calculator?
The process of calculating how
much one is entitled to as a SERP compensation is usually complex and may
require the services of an expert. You may visit www.missoldpension.org.uk
and call us now and we shall help
you in claiming your compensation without a dim stress. The key steps for
knowing how much your compensation includes:
Calculating your surplus earning:
This is the 1st step, you get this value by getting the
difference between ones upper and lower earnings limit for every tax year you
were a SERPS member. This surplus figure continues to increase until the
individual hits state retirement age.
Getting the total earnings: You add together total earnings for
each tax year, between 1978 and 1988, you divide by four, and from 1988 and
2002 you divide by five.
Final SERP compensation value: This
is the got when you divide the number of tax years that passed between 1978/79
and the year in which you reach or will reach the retirement age and the total
What if I did “contracting out”?
Contracting out meant you made
your contributions to a private pension scheme leading to a reduced or full
elimination of your SERPS entitlement. This was most common with employers
leading to reduced National Insurance Contributions.
Hence, if you did contract out
during or after the 4th month of 1997, then you have no SERPs
compensations as relating to earnings after that duration. Indeed, if you
contracted out before that, your compensation will be reduced as stipulated in
the “contracted-out deduction” manual.
In addition to the basic state
pension scheme, the purpose of SERPS was to boost the total amount being paid
to retirees. Originally, it was thought that the pension should be 25 percent
of ones total earnings, but this was later changed to 20 percent.
It’s worthwhile to note that the
State Second Pension has fully replaced the SERPS plan, and your quick move to
initiate a SERP claim process would benefit you and also help you to make
informed investments at Missoldpension.