Nonqualified Deferred Compensation Plans (NQDC)

Empower your top talent with a deferred compensation plan that rewards loyalty and drives retention.

What is NQDC?

NQDC plans allow executives to defer a portion of their income for future payout, while the company gains a flexible tool for retention and alignment with long-term goals.

It is a customizable benefit program that allows companies to reward and retain top executives beyond traditional 401(k) limits. This helps companies compete for talent, rewarding leadership while creating lasting alignment between executives and organizational performance.

Flexibility in Plan Design

Companies can tailor NQDC plans to meet specific organizational and executive needs: choosing which employees participate, customizing vesting schedules, and aligning benefits with performance goals.

No restrictions based on salary, tenure, or role.
Fully customizable to attract and retain key leadership talent.

Strategic Retention Tool

NQDC plans are simple to implement and maintain, with minimal regulatory and reporting requirements.

Customizable vesting schedules encourage retention.
Supports executive continuity and succession planning.

Streamlined Administration

NQDC plans are simple to implement and maintain, with minimal regulatory and reporting requirements.

No complex ERISA filings.
Simplifies compliance and administration for employers.

Unlimited Contribution Potential

Unlike qualified retirement plans, NQDC plans are not capped by IRS contribution limits. This allows companies to offer meaningful, performance-based incentives to senior leaders.

No statutory limits on employer or employee deferrals.
Supports executive wealth-building beyond 401(k) constraints.

FAQ

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How does a NQDC plan work?

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Who does a NQDC plan work for?

Are there disadvantages of NQDC plans?

Why offer nqdc plans?

How does nqdc differ from 401(k)?

How does taxation work on nqdc plans?