Pub. 7 2017-2018 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S November • December 2017 15 to the 401(k) look-alike plan should not provide executives with incentives to take imprudent risks that are not consistent with the long-term health of the bank. Deferring income intononqualifiedplans does have its disad- vantages. For thebank, nonqualifiedplans—unlike theirqualified counterparts—arenot favoredby a current taxdeduction. The tax deduction is delayed until the officer receives the benefit. There is also risk because nonqualified plans need to remain unfunded to achieve the desired taxdeferral. Anonqualifiedplan must remain just a promise to pay a retirement benefit. It is a liability on the bank’s books and nothing more. In the event of bankruptcy or company takeover, executives in the plan stand to lose some or all of the money in the nonqualified plan. Summary Knowing that retirement security is aprimary concernof your executives, it may be time for your bank to rethink its approach to executive compensation. By adding a 401(k) look-alike plan, the ability to attract and retain talented executiveswill be greatly enhanced.  Equias Alliance offers securities through ProEquities, Inc. mem- berFINRA&SIPC.EquiasAlliance is independentofProEquities,Inc. Trey Deupree, a consultant at Equias Alliance, has 20 years of expe- rience in the BOLI/nonqualified benefits industry. He has assisted hundredsofbankswiththedesignand implementationofprograms to recruit, retain and reward key officers and directors. To learn more, contact Trey Deupree at 469-252-1038 or tdeupree@equiasalliance.com.