Nonqualified Deferred Compensation Plans

Extra savings beyond qualified plan limits

Nonqualified deferred compensation plans (deferred compensation plans) allow key employees to contribute additional tax-deferred compensation (up to 100%, depending on plan design) to their savings—and allow employers to make discretionary contributions as well.  This can often be an easy way to contribute more and eliminate any savings gaps for highly compensated employees, where appropriate.

Is a nonqualified deferred compensation plan right for your organization?
To offer a viable nonqualified plan, your business should meet certain criteria:
  • Public, Private C Corporation, Pass-through tax entity (for non-owners), or non-governmental tax-exempt business entity
  • Substantial business continuity and financial integrity
  • Highly compensated employees with a retirement gap due to qualified plan limitations