What does SERP mean in EMPLOYMENT

What Is A SERP?

A SERP stands for “Student Employee Retirement Plan” and is an employee sponsored plan created specifically for students working at educational institutions. These plans reduce barriers that hinder young people from saving for retirement, and provide a more secure future for those employed in the academic sector. Often times these plans are offered as part of a package of benefits provided by colleges and universities, which can include health insurance, dental care coverage or other perks such as paid time off or special leave privileges. Typically SERPs come with some type of employer contribution in order to incentivize participation. They also often come with tax advantages like those found in traditional IRAs or 401(k) plans. However, due to the unique nature of these plans, they have some specific rules and guidelines that individuals should be aware of prior to enrollment before maximizing its potential.

How Does A SERP Differ From Other Retirement Saving Plans?

Unlike other types of retirement savings programs such as IRAs or 401(k)s, SERPs are designed specifically with students in mind so certain features may differ from what you would find with more typical workplace offerings. For example, eligibility requirements tend to be more lenient when it comes to age limits since younger workers are seen as having greater need for help saving for retirement than their older counterparts. Furthermore, there are generally fewer investment options available under a SERP than those offered through IRAs or 401(k)s but each one must meet standards set forth by the Internal Revenue Service (IRS). Finally, unlike traditional retirement accounts where contributions can only be made via payroll deductions (pre-tax dollars), many SERPs allow post-tax contributions which increase its value by allowing individuals flexibility on how much they wish to save each year without going over the IRS yearly contribution limits.