Personalized retention solutions for senior officers or highly specialized personnel

A key person is a shareholder, a senior officer, or an employee whose contribution is essential to the business’s success and survival. Thus, it is essential to implement mechanisms for long-term employee retention and to be prepared for the loss of this essential contribution in case of death, disability or critical illness. A key persons program should be an integral part of the business continuity plan and of the succession plan.

The Key persons insurance is one of the best ways to help your business survive in case of the death, disability or critical illness of a key employee as the insurance pays out a tax-free amount that could serve as working capital and facilitate management of issues related to the death, disability or critical illness such as:

  • Recruitment, hiring and training of a replacement
  • Debt reimbursement and dealing with creditors
  • Dispelling the fear of possible lenders regarding the business’s financial health
  • Reassure clients, employees, and investors about the business’s survival

Implementation of personalized benefits for senior officers or key personnel, is an excellent long-term retention tool for the business

  • Disability insurance for high-earning employees compensates the coverage gap between group insurance and the high-earning employee’s actual income (ex.: generally $5,000/month for an income of $87,500 for a high-earning employee)
  • The Deferred Profit-Sharing Plan complements the RRSP with an incentive plan, and incites the employee to participate in the business’s success
  • As for persons related to the business who hold at least 10% of a share class, the individual retirement plan (IRP) generally allows to save more for retirement than with an RRSP.

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