According to Mercer’s 2012/2013 Executive Benefit and Perquisite Practices Survey for Tax-Exempt Organizations, that number is up from 49% two years ago. These plans are most popular among health care organizations (67%), followed by foundations and charities (53% and 39%, respectively). Among all tax-exempt sectors, the prevalence of nonqualified plans significantly decreases when moving down the executive rank.
The survey shows that nearly three times as many organizations offer supplemental executive retirement plans (SERPs) for top officers (37%) rather than restoration plans (13%)—plans that provide benefits based on the same provisions as the qualified plan without regard to IRS limits. Just 8% of tax-exempt organizations provide both types of plans. Moreover, SERPs are most popular among health care organizations and charities, while restoration plans are more common among foundations and educational institutions.Nearly all responding organizations offer basic life insurance coverage (for all employees) with nearly half providing employer-paid coverage of one times pay. In addition, about 40% of organizations offer supplemental employer-paid life insurance for executives with median total coverage of approximately three times base salary.
While executives are covered by the same employer-paid long-term disability (LTD) plan as all other employees, it is common for them to receive additional employer-paid coverage through a supplemental group plan or an individual policy. Just more than one-third (34%) of all organizations and 50% of health care organizations provide supplemental employer-paid LTD coverage.
According to the survey, the most common perquisite for executives is a car or car allowance, provided by 44% of organizations. Country club dues—offered by 17% of organizations—are the second most popular, followed by financial counseling/tax advice (12%).
“Executive benefits continue to be a strategic component of total rewards programs,” said Pat Kopacz, principal with Mercer’s Talent business. “Organizations are wise to evaluate market trends as well as the mix of benefits on a regular basis to effectively attract and retain their top employees.”Mercer’s 2012/2013 Executive Benefit and Perquisite Practices Survey for Tax-Exempt Organizations includes responses from more than 460 tax-exempt and managed care organizations across the U.S.