One of the most efficient ways to help your executives overcome the Retirement Income Gap created by qualified plan limits is by using a well-designed Nonqualified Deferred Compensation plan. It offers you and your highly compensated employees the flexibility to reach unique business and personal financial goals.
Benefits to Employer
- Design the plan to meet the needs of your key executives to help recruit, retain and reward those key human assets.
- Pick and choose who to make eligible for the plan among highly compensated employees.
- Plan design and benefits can be tiered among different groups of participants giving you the flexibility to build the plan for your specific business requirements.
- Matching contributions can offset missed qualified plan contributions due to testing issues.
- Vesting schedules on company matches can create additional incentives for key executives to remain with the company and stay motivated.
Benefits for Key Executives
- Each executive elects to defer compensation pre-tax. (FICA and FUTA taxes still apply.)
- Tax-deferred accumulation on earnings.
- No annual limitation on contributions. Up to 100% of compensation can be deferred. (Subject to company limits.)
- No early withdrawal penalties via in-service accounts. (Subject to 409A regulations.)