United States

Five considerations when offering nonqualified compensation plans


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The most effective compensation plans attract and motivate personnel while simultaneously helping the company meet its goals. Yet limitations imposed on qualified plans can reduce their value as a means to retain highly compensated executives. What is available beyond a basic 401(k) to retain top talent?

One incentive option is a nonqualified plan, which is a deferred compensation plan not set up to meet the rules governing qualified plans. The attached white paper discusses five considerations for these nonqualified plans:

  1. How is a nonqualified plan different from a qualified plan?
  2. What are the key considerations of a nonqualified plan?
  3. What is the security of a nonqualified deferred compensation plan and what does it promise?
  4. How can a nonqualified deferred compensation plan be funded?
  5. How can a nonqualified deferred compensation plan be designed?

For additional information regarding nonqualified plans, review a webcast Q&A.