Nonqualified Deferred Compensation Plans

Overview

Nonqualified Deferred Compensation Plans

Nonqualified Deferred Compensation (NQDC) Plans are used by plan sponsors who want to give back to valued employees whose leadership and expertise are hard to match. There are four major types of non-qualified plans: deferred-compensation plans, executive bonus plans, group carve-out plans, and split-dollar life insurance plans.

NQDC plans help attract, retain, and reward executives and other highly compensated employees. This plan type can be a powerful tool in providing an ownership-like experience for an employee while offering additional incentives and benefits that cannot be provided with traditional retirement plans.

Why Choose FuturePlan for Nonqualified Deferred Compensation Plans?

FuturePlan offers high-touch personalized service from local TPAs backed by the strength and security of a large national firm.

Breadth of experience

FuturePlan experts have been designing and implementing (NQDC) plans since 1980 across all industry sectors.

Service Teams

We have highly specialized service teams to exclusively support NQDC plans and provide customized communications, education and participant websites for the plan sponsor.

Expert Consulting

FuturePlan has decades of industry expertise to leverage your behalf. We consult on plan design, plan dc plan document and implementation, investments, and corporate financial reporting to name just a few.

Ideal Candidates

NQDC programs are ideal for start-ups to very large organizations. Ideal candidates generally include:

  • Plan Sponsors who want to create a performance-driven environment or a transition plan for successors.
  • Firms wanting to provide key employees with handsome rewards without creating an immediate tax burden and allow employees to defer taxes until retirement (ideally when they are in a lower tax bracket).
  • Any plan sponsor who wants to offer future benefits without the legal requirement to fund those benefits, as in the case of a defined benefit plan, for example.

Plan Advantages

Attract and Retain Key Employees

Significant benefits can be offered at a future date or forfeited unless certain conditions are met. This can ensure a long-term commitment by an employee.

Income Replacement

NQDC benefits, in addition to a qualified plan, can allow key employees to retire with total pay replacement.

Bypasses Testing Restraints

These plans are exempt from nondiscrimination and top-heavy testing that qualified plans are subject to.