Other Post-Employment Benefits - OPEB

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DEFINITION of 'Other Post-Employment Benefits - OPEB'

Post-employment benefits that an employee will begin to receive at the start of retirement. This does not include pension benefits paid to the retired employee. Other post-employment benefits that a retiree can be compensated for are life insurance premiums, healthcare premiums and deferred-compensation arrangements.

BREAKING DOWN 'Other Post-Employment Benefits - OPEB'

Life insurance and healthcare premiums that a retired employee 'earns' after retirement will most likely continue to be a taxable benefit. This will increase the retiree's total income tax payable for any given year.

A deferred-compensation arrangement is a salary agreement where the employee, based on his/her work history or performance, is paid a salary for some predetermined time after retiring. The tax consequences for such an arrangement are often unattractive to the company, as payments are not usually tax deductible.

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