Set it and forget it - Are you ready for retirement?

Set It and Forget It – Are You Ready for Retirement?

Set It and Forget It – Are You Ready for Retirement?

Are you thinking about your retirement? Or, how about the cost of replacing that key individual who you have identified as your possible successor?

Bank Director’s 2023 Compensation Survey reported,

“Concern about succession planning for the CEO and other key executives ticked up from last year, with a little over a quarter of respondents citing it as a top compensation-related challenge…..The survey also found that bank leaders have less confidence in their long-term succession plans for the CEO than they do in shorter-term plans in the event of a sudden departure or leave of absence.”

If your key talent leaves, what will it cost you and your organization in time, money and business to replace them? Adding a lifetime retirement benefit could be the right move with a two-fold benefit – savings for your organization and an enhanced benefit for your executive – a benefit you can set and forget. LINQS+ is used in conjunction with both a SERP and an annuity – but not just any annuity.  This annuity product is a fixed index annuity that is never actually annuitized.  It’s the annuity that provides the payments to the retirees.

The guaranteed fixed-income benefit provides the very reason they would stay, securing their loyalty for future years.

A CFO’s view

Lynn Joyce, the chief financial officer at Southern State Bank, a full service, state chartered commercial bank in Georgia and Alabama describes LINQS+ (Lifetime Income Non-Qualified Solution) as “instrumental, an outstanding program for us to meet the objectives of the board and compensation committee to retain senior management.” It allows her organization to offer a more robust retirement plan with a SERP that includes LINQS+ rather than a traditional 10- or 15-year payout program.

Joyce also points out that from a financial standpoint, it’s “the most efficient for the bank and most rewarding to the participants.” It’s double edged-favorable from an expense standpoint for the bank and extremely favorable with the resulting plan for the participants. “LINQS+ is the best from a financial expense to the bank, minimal expense to us from the way it’s structured and the maximum plan for the participants. Once you see it  and compare it you’d say why would you want to do it the traditional way without LINQS+.”

Real outcomes

In an extremely tight labor market, the past three years have been especially competitive in attracting, motivating and retaining the key executives and operations personnel that live and breathe an organization’s mission and goals. LINQS+ isn’t traditional but produces real outcomes.

LINQS+ currently in play

  • $255 million in force
  • 635 policies
  • $24 million in annual payments

Why LINQS+ matters

  • Savings of up to 40% over a traditional retirement plan
  • Executives are outliving their retirement plans (50% of executives live to 88; 35% of executives live to 90)
  • Not contingent on interest rates or market performance
  • Can be combined with existing deferred compensation plans

The Bank Director survey summary notes, “The hiring environment remains tough and compensation costs have continued to climb, but in 2023, bank leaders renewed their focus on aligning pay with performance as succession planning concerns edged up.”

Consider the sense of relief when a lifetime benefit is in place for your senior management team removing the uncertainty of aging out of a 10- or 15- year plan. Impress them with your loyalty and appreciation.

With LINQS+, you are future proofing your bank through innovative retirement planning.

Contact your Newcleus Compensation Advisor for details and a free analysis of how LINQS+ will enhance your current compensation plan and complement the retirement benefits offered.