Knowledge Center
Nonqualified Deferred Compensation Plans and the Top Hat Exemption
Nonqualified deferred compensation plans (NQDCPs) are effective, flexible tools to help recruit, reward and retain top talent. Employers determine who participates in these plans, the amount of plan benefits, the timing of when benefits can be received and the vesting
Using a Rabbi Trust to Protect Nonqualified Deferred Compensation Plan Participant Benefits
Nonqualified deferred compensation plans (NQDCPs) are effective and flexible tools for recruiting, rewarding, and retaining top talent. However, unlike qualified plans such as 401(k) programs, NQDCPs present unique risks to participant benefits.
Nonqualified Excess Deferral Plans for Key Employees
Do your key employees consistently reach the savings limits of your qualified retirement plan? Does your 401(k) plan issue refunds to highly compensated employees due to failed discrimination testing?
Deferred Compensation Plans
While 401(k) plans offer valuable retirement benefits for most employees, highly compensated employees (HCEs) often face limitations. IRS contribution limits can be disproportionately low relative to their higher incomes, restricting their ability to save effectively.
Pass-Through Entities and Deferred Compensation Plans – Key Considerations
Many closely held businesses are structured as pass-through tax entities, such as S corporations or limited liability companies (LLCs). This structure allows these businesses to avoid double taxation, which occurs in C-corporations where income is taxed at both the corporate level and again when dividends are distributed to owners.
Deferred Compensation Plan Features Overview
Using Non-Qualified Deferred Compensation Plan “True-Up” Features to Restore 401(k) Plan Matching Contributions. Non-qualified deferred compensation plans (NQDCPs) are valuable tools for helping highly compensated employees (HCEs) create supplemental retirement income.
FICA Taxation and Deferred Compensation Plans — Key Considerations
NOne of the primary benefits of nonqualified deferred compensation plans (NQDCPs) is income tax deferral. Employee deferrals and employer contributions are not subject to current income taxation, allowing benefits to grow tax-deferred over time.
Corporate-Owned Life Insurance (COLI) Implementation and Plan Management Overview
Your company has chosen to informally fund its nonqualified deferred compensation plan (NQDCP) using Corporate-Owned Life Insurance (COLI). Like many plan sponsors, you have determined that COLI is a tax-efficient method to finance and recover the costs associated with your NQDCP.