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An Employer's Guide to Severance Plans

This page features information on the following topics regarding severance plans:
  • Overview 
  • Should You Adopt a Formal Severance Plan or Policy? 
  • Considerations in Adopting Your Severance Plan 
  • ERISA Considerations 
  • Additional Information 

Severance plans are generally designed to provide financial support to employees who lose their jobs through no fault of their own. Benefits offered through a plan can help the employee weather the period of unemployment following a termination or layoff, and to some extent compensate the employee for the loss of seniority and other privileges or rights the employee may have enjoyed in his or her position.


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