Advisor Rik Wehmeier: As 401(k) plans have replaced pensions, nonqualified deferred compensation plans have eclipsed SERPS. However, SERP benefits are very effective for select groups, and can be the answer for replacing lost benefits when recruiting a mid-career manager.

Advisor Bill Folan: A typical SERP benefit would be directed to provide for 60%-70% of the executive’s top five years of compensation-- reduced by the executive’s benefits from Social Security benefits, 401(k) distributions, and nonqualified plan distributions.

Because SERP benefits are paid when the participating executives retire, they would lose the benefit if they left the company. Hence the term "golden handcuff." You also hear the expression, "golden handshake," referring to the SERP benefit promised to a new hire to perhaps cover the benefits he/she would leave on the table when they come to work for a new employer in the middle of his/her career.