Clark Consulting Announces Retail Results from 14th Edition of Executive Benefits – A Survey of Current Trends

Share Article

To identify how corporate America is providing certain nonqualified benefits to its executives, Clark Consulting surveyed Fortune 1000 companies on such things as plan prevalence, design features, financing and administration. Results from the Retail sector show a broad prevalence of nonqualified executive benefit programs informally funded with corporate-owned or trust-owned life insurance (COLI/TOLI).

Clark Consulting, LLC today released 2009 Retail Results, the last 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, energy and utility, and manufacturing.

In general, findings for the retail sector show broad prevalence of nonqualified executive benefit programs, implying that employers in the space recognize their value.

"In the traditional view, the retail industry’s performance is driven largely by consumer spending, which in turn depends on the state of the economy as measured by consumer confidence, credit availability, income and employment. So an improvement in these indicators would imply an imminent recovery in the sector," said Kurt Laning, President of Clark Consulting.

"But the duration and severity of the current downturn have introduced other variables: has consumer behavior shifted fundamentally towards more saving and less consumption, and will the ‘new frugality’ adopted by consumers become ‘business as usual’ in future?" Mr. Laning continued.

"If the answers to both questions are ‘yes’, then top-line growth in an upturn may be softer than expected. In such an environment, companies must gain a clear understanding of their customers’ needs and value drivers, and must also achieve greater operational and financial efficiency," he said.    

"Although this challenges the overall sector, it also presents significant opportunities for those companies with the right leadership and talent in place. People with deep understanding of the space or with expertise in the necessary disciplines will be highly valued," he concluded.

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 retail sector.

2009 SURVEY HIGHLIGHTS: RETAIL SECTOR

  • The vast majority of respondents report sponsoring NQDC plans (90%). Although SERPs are less prevalent than NQDC plans, they are still widely used. 60% of respondents report sponsoring SERPs.
  • NQDC plans are more likely to be informally funded than SERPs. Almost nine in 10 respondents (89%) report informally funding their NQDC plans. 43% of the respondents report informally funding their SERPs, with an additional 29% considering informal funding.
  • Corporate-owned or trust-owned life insurance (COLI/TOLI) is the most commonly reported informal funding vehicle for both plan types. 75% of respondents who informally fund their NQDC plans do so with COLI/TOLI; the corresponding percentage for SERPs is also 75%.
  • Respondents prefer exclusive third-party or combined in-house and third-party administration, especially for NQDC plans (none administered exclusively in-house). 75% of SERPs are administered exclusively by a third-party provider. 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 Retail 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(at)clarkconsulting(dot)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: Robert Frump, Editorial Director, Clark Consulting, 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.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Robert Frump
Visit website