retirement plan
consulting

While our dynamic model and personal approach set us apart, the true Newcleus difference can be found in the way we build—and sustain—our relationships by providing uncommon support through every phase of the retirement planning process. Our highly experienced team has extensive knowledge in the banking industry and understands the strategies required for the development of a sound recruitment and retention roadmap.

RETIREMENT PLANNING BENEFITS

  • The Newcleus team will work with you to develop customized plans and strategies that provide comprehensive long‑term incentives and benefits that attract and retain the banking industry’s top talent.
  • Our passion is developing sound executive compensation plans based on organizational philosophies and good governance while meeting financial goals and objectives.
  • Our more collaborative, client-centric process allows Newcleus to be more adaptive to support your organization as it faces the challenges of today and tomorrow.
An elderly couple discussing their retirement benefits provided by Newcleus.

Some of our financial tools include Bank‑Owned Life Insurance (BOLI) and Credit Union Owned Life Insurance (CUOLI), alternative investments that create a tax-advantaged increase in bank or credit union income that’s available to fund supplemental executive retirement plans (SERPs) or other forms of employee benefits. The purchase of life insurance can be further leveraged to provide the plan participant/executive supplemental life insurance coverage and/or a tax-free SERP benefit to the executive’s beneficiary.

Employers can also utilize our proprietary LINQS+ strategy to provide lifetime SERP benefits at a potentially reduced cost. Given increasing life expectancy, a lifetime benefit can be an extremely valuable component of an executive retirement plan that is meant to entice, hire, and retain the top performers in the banking field.

Day to day, our secure and proprietary portal provides clients access to comprehensive information and customized reporting and analysis needed to properly manage and maintain BOLI and Non-qualified benefit plan programs, while our succession planning ensures protection and service for your plan for decades to come. When it comes to commitment to service, no other firm comes close.

Amounts accrued by the employer on your behalf will not be taxed for federal income tax purposes until you begin receiving payments. Usually, this occurs upon your retirement, but could also occur if there is a separation from service or some other triggering distribution event.

The death benefit payable to your beneficiary is taxable as ordinary income for federal income tax purposes. Your tax advisor can provide you with more information on this topic.

No, loans are strictly prohibited by IRS rules.

Yes and No. Distributions made from the plan will not affect your Social Security benefits themselves. For purposes of Social Security, these distributions are considered “earned” when they are credited to your account; therefore, they do not constitute earned income under the earnings test when they are distributed to you.

However, because the distributions will be considered gross income for federal income tax purposes, they may have the effect of subjecting your social security benefits to federal income taxation. These issues need to be discussed with your tax advisor.

No. Sometimes an employee wants to use these benefits as collateral against for a loan. You cannot in any way sell, assign, hypothecate, alienate, encumber or in any way transfer or convey in advance of receipt, any of your rights under the plan.

As you “vest” in the benefits under this plan, your employer will be required to withhold all applicable payroll taxes (Social Security/Medicare, etc.) on only the current year’s vested amount. Once you reach retirement, if your employment taxes have been properly taken into account, you will not pay payroll taxes on the distributions you receive.

Given wage base limitations imposed on certain taxes and interest applied to amounts taken into account for FICA purposes, paying these taxes as you vest is generally advantageous for both the executive and employer.

There are a number of permissible distributions under this type of plan. Please refer to your specific plan document for more detail.

  • Generally, benefits under this type of plan are designed to be paid out upon reaching a certain retirement age.
  • Upon your death, your named beneficiary may receive a lump sum or installment payments that would equal the benefit you would have received if you had lived.
  • If a change in control occurs, often the plan document will call for a benefit payment equal to the retirement benefit. Again, please consult your specific plan document for more details.
  • Upon your disability, while employed, often a plan document will provide you with a benefit that is less than your retirement benefit.
  • If you experience an unforeseeable emergency, you may petition the board of directors to receive a hardship distribution. The amount of the hardship distribution will be determined by the board and in compliance with Section 409A of the Internal Revenue Code.

Once the plan document has been signed, IRS rules make it very difficult to make changes. Some changes to the form and timing of payments are permitted, but only with a mandatory 5-year delay in payment.

In the event that your employer becomes insolvent, you will be an unsecured general creditor of the employer. Your claim against the assets of the employer will be considered along with the claims of other general creditors of your employer.