Can salary continuation be a retirement plan?
A Salary Continuation Plan is a way to provide an additional source of retirement income to selected key employees, including the business owner. It can also provide income to beneficiaries should the covered person die prematurely.
Are salary continuation plans subject to Erisa?
A salary continuation plan is a corporate sponsored benefit generally designed to replace an executive’s income in the event of his/her death, retirement or disability. The benefit plan is exempt from ERISA and must be confined to a select group of highly compensated people.
What is a salary agreement?
The contract typically provides for salary or “base compensation” and benefits. Salary is guaranteed at “no less than” a set amount, and the parties sometimes agree that the employee will be eligible for annual salary increases.
Is salary continuance taxable?
The ATO says salary continuance cover is only tax deductible to the super fund.
How does a salary continuation plan work?
A salary continuation plan describes in writing, before any disability occurs, what an employer will do in the event an employee becomes disabled. With such a plan, the employer can continue paying all or part of an employee’s salary.
How do you write a salary contract?
Here are some steps you may use to guide you when you write an employment contract:
- Title the employment contract.
- Identify the parties.
- List the term and conditions.
- Outline the job responsibilities.
- Include compensation details.
- Use specific contract terms.
- Consult with an employment lawyer.
How does salary continuance work?
Salary continuance occurs when an employer terminates the employment relationship, but continues to pay the employee’s regular pay and benefits until the end of the notice period without requiring the employee to perform any work. The severance is paid out over time.
What is temporary salary continuance?
Temporary salary continuance insurance is also known as TSC or income protection. It helps replace your income if you ever become too sick or injured to work, by paying a monthly payment, as a percentage of your salary (if your claim is approved).