SERP (supplmental executive retirement plan)

Has anyone setup a SERP plan within benefits application?

The details I have are:
1) The current SERP is considered the employees money at the time funded and therefore is considered compensation. Employer pays this. Money is kept in special account at retirement vendor.
2) Will be based on a 5 year vesting.
3) The employee is not taxed until fully vested.
4) This original payment does not raise the employee’s taxable income and is not reported on the W-2.
5) Once the employee is vested; the money is sent back from retirement vendor to our organization. We will process this payment through payroll and at that time this will show as taxable income. The money would then be deposited back to retirement vendor via an employee deduction.

Any help is greatly appreciated!