Energy and Utility Sector Focuses on NQDC Executive Benefits, SERPS, Clark Consulting LLC Survey shows

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The vast majority of respondents report sponsoring NQDC plans (90%). SERPs, although less commonly used than NQDC plans, are still widespread. 75% of respondents report sponsoring SERPs. Clark Consulting was told. NQDC plans are more likely to be informally funded than SERPs. Just over three-quarters of respondents (76%) report informally funding their NQDC plans; 57% report informally funding their SERPs. Corporate-owned or trust-owned life insurance (COLI/TOLI) is the most commonly reported informal funding vehicle for both types of plans. 67% of respondents informally funding their NQDC plans and 63% of those informally funding their SERPs use COLI/TOLI.

For companies to navigate this environment, they will need strong leaders and talented managers from a range of disciplines; keeping these key employees motivated will be one of the important drivers of success in the space.

DALLAS, TX, March 17, 2010 - Clark Consulting LLC today released "2009 Energy and Utility Results," the second of four companion pieces to the fourteenth edition of "Executive Benefits - A Survey of Current Trends." Each piece in the series provides a more in-depth look at the survey results for specific industries, including financial services and insurance, manufacturing and retail.

In general, findings for the energy and utility sectors show that employers broadly recognize the value of well-designed and adequately funded executive benefit plans.

"Although the energy and utility sectors are not at the center of the current recession, they face some interesting challenges in the medium- to long-term," said Kurt Laning, President of Clark Consulting.

"On the one hand, there are concerns around maintaining and upgrading aging infrastructure so it can keep pace with rising demand," Mr. Laning continued. "On the other hand, environmental impact concerns seem to suggest the need to adopt innovative approaches."

"Throw in the ongoing unpredictability of oil prices and we have a complex and ever-evolving situation," he said. "For companies to navigate this environment, they will need strong leaders and talented managers from a range of disciplines; keeping these key employees motivated will be one of the important drivers of success in the space."

The goal of the survey is to identify how corporate America is providing certain nonqualified benefits to its executives. It focuses on plan prevalence, design features, financing and administration within the two main types of nonqualified plans: nonqualified deferred compensation (NQDC) plans and supplemental executive retirement plans (SERPs). Below are the 2009 survey highlights for the energy and utility sectors.

2009 SURVEY HIGHLIGHTS: ENERGY AND UTILITY SECTORS

  • The vast majority of respondents report sponsoring NQDC plans (90%). SERPs, although less commonly used than NQDC plans, are still widespread. 75% of respondents report sponsoring SERPs.
  • NQDC plans are more likely to be informally funded than SERPs. Just over three-quarters of respondents (76%) report informally funding their NQDC plans; 57% report informally funding their SERPs.
  • Corporate-owned or trust-owned life insurance (COLI/TOLI) is the most commonly reported informal funding vehicle for both types of plans. 67% of respondents informally funding their NQDC plans and 63% of those informally funding their SERPs use COLI/TOLI.
  • Respondents prefer exclusive third-party or combined in-house and third-party administration, especially for NQDC plans (none administered exclusively in-house). 70% of SERPs are administered by a third-party or through a combined arrangement. These preferences may reflect a need for more sophisticated administration in light of the requirements of Internal Revenue Code section 409A.

For more information about Clark Consulting's 2009 Energy and Utility Results or Clark Consulting's 14th Edition of Executive Benefits - A Survey of Current Trends, visit our website at http://www.clarkconsulting.com/execbenefitssurvey or contact us at requests@clarkconsulting.com. Our experienced consultants can help you dissect the information and put it into the context of your business.

Clark Consulting, LLC, headquartered in Dallas, is an AEGON company. AEGON N.V. is an international life insurance, pension and investment group based in The Hague, The Netherlands, with businesses in over twenty markets in the Americas, Europe and Asia.

Clark Consulting is a leading source of strategic financing solutions such as bank-owned life insurance (BOLI) and corporate-owned life insurance (COLI) for inefficiently funded and unfunded liabilities that result from executive and employee benefit programs.

Since 1967, Clark Consulting has helped place thousands of benefit plans and serves as the record keeper for billions in assets for leading American corporations and banks.

Contact: 214-661-9852

Securities products and services are offered through Clark Securities, Inc., DBA CCFS, Inc., in
Texas: 2100 Ross Avenue, Suite 2200, Dallas, TX 75201-7906. Phone: 800.999.3125. Member FINRA and SIPC.

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