Originally Posted by
sailingfun
Many retirement plans allow the company full deductibility for funding into employee plans. The tax savings can be huge. You can bet the company will know exactly what the tax implications are during negotiations. If they are favorable it allows us to negotiate a bigger slice of the pie.
There has been much speculation on the tax savings to the company, but nobody has quantified it. Here is my analysis of the tax savings. $0. They still pay employment taxes and the employer portion of FICA on deferred compensation plans. Furthermore, the company has added administrative responsibility to fund the plan. It actually adds a burden on the company, not a tax savings.