Non Qualified Plan Services
The Baker Companies assists corporations in the design, funding, implementation and servicing of
non-qualified executive benefit plans by following a thorough, consistent process.
The Baker Companies facilitates the identification of the Company's goals and objectives in designing
the benefit to include:
- Participant Eligibility
- Deferral Options
- Includable Compensation (Salary, Bonus, Incentive Compensation)
- Vesting
- Distribution Options
- Retirement Eligibility
- Corporate Contributions
- Fund Choices
- Fixed Rate Options
The Baker Companies prepares a report detailing recommendations for the design of the benefit or
enhancements and / or changes to the current benefit.
The Baker Companies will analyze the various alternative funding options to include:
- Pay As You Go
- Mutual Fund
- Life Insurance
These funding options are analyzed from a finance perspective to include:
- Annual and Cumulative P & L Impact
- Cash Flow Implications
- Present Value Cost Calculations
- Asset to Liability Matching
For plans funded with mutual funds we assist the company in identifying the funds
available for participants. Some companies will want to mirror the funds in their 401(k)
plan while others desire different but complementary fund choices for existing retirement
plans. Regardless of the approach, The Baker Companies assists the company in identifying
various fund selections for the plan.
If life insurance is selected as the funding option, The Baker Companies requests multiple
insurers to submit proposals to meet the funding objectives based on the final plan design. Only
insurers, which meet the clients stated financial ratings based on a credit risk analysis
would be offered the opportunity to bid. The products / carriers submitted are analyzed based
on financial ratings, projected short and long term performance, fund options, as well as the
carrier's commitment to the market. The responses provided are compared to identify the
various product components to determine the most appropriate structure for the clients needs:
- Product Type
- Policy Costs and Charges
- Cash Values in Key Years
- Death Benefit configurations
- Assumptions and Guarantees
- Investment Options
- Fixed Rate Accounts
- Product History
Once the design and funding has been selected, The Baker Companies manages, with a
representative of the company, the entire implementation process to include:
- Plan Review with Finance
- Drafting the Announcement Memorandum to Participants
- Drafting Enrollment Materials for Plan Participants
- Finalizing Plan and Trust Documentation
- Projecting Bookkeeping / Accounting Entries
- Finalizing a Calendar of Events Timeline
- Full Documentation in a Summary Book
At the Company's request, The Baker Companies assists with the enrollment meetings to
convey the significance of the benefit to the participant, explaining how the Plan works,
increasing the participants benefit awareness and thereby increasing overall participation
in the benefit.
We communicate the integrated benefits to plan participants incorporating the qualified
and non-qualified retirement benefits to demonstrate the total benefit package. We can
assist employee's asset allocation and planning.
The Baker Companies works with the Company to develop the desired format to be provided
to the plan participant detailing the executive's balances, deferral activity, fund
allocations, distributions activity and transfers between funds. The statements are
provided on a quarterly basis or at some other desired time interval.
Depending on the size of the plan, number of fund choices and number of participants,
the Company may want to utilize internet access to allow participants to view their accounts,
potentially perform reallocations, submit deferral elections, enrollment and change
beneficiary designations.
The annual Calendar of Events discussed in the Implementation section details the ongoing service
requirements of the Plan. On at least an annual basis The Baker Companies reviews with the
Company the following:
- Budget Projections
- Projected P & L, Income Statements and Cash Flow Impact
- Projected deferral Levels
- Funding Levels
- Fund Allocation
- Plan Participation
- Reaffirm Corporate Goals and Objectives
The annual review process updates the Summary Book.
