how is a serp paid out 
a supplemental executive retirement plan serp is typically paid out either as a lump sum payment or as an annuity a lump sum arrives all at once which may have the impact of raising your income into a higher tax bracket an annuity is deposited over time periodically in a set schedule consider consulting with a financial professional to weigh the value of a lump sum payment versus the future value of periodic payments take your time in deciding whether a lump sum payment or an annuity is right for you the bottom linea supplemental executive retirement plan serp is a type of deferred compensation used to attract and retain high level employees as an unqualified plan that typically takes on the form of a cash value life insurance policy it doesn t come with any upfront tax benefits for the employer or employee however the company does gets tax benefits when it pays the premiums on the insurance even if the employee quits the company still has access to the insurance s cash value if the employee passes away the company is a beneficiary of the life insurance policy if you are considering a role that comes with a serp make sure your analysis takes into account all factors the assets may seem attractive but pay careful attention to the vesting schedule be realistic about your future at the company don t take a serp for granted 