Non-Qualified Deferred Compensation Plans
Recruit Reward and Retain top talent without the restrictions of traditional ‘qualified’ plans governed by ERISA rules
There’s a reason 92% of large companies offer Non-Qualified Deferred Compensation plans (2024 Newport/Plansponsor NQDC Trends Survey Report).
Non-Qualified Deferred Compensation (NQDC) plans—often called “Top Hat” plans—allow select employees to defer income beyond 401(k) limits, while employers can contribute with customized vesting to enhance retention. These plans offer powerful benefits for the right organization but are not a one-size-fits-all solution.
- Voluntary pre-tax savings above and beyond 401(k) limits
- Saving flexibility
- Flexible vesting schedules to help keep employees
- Flexible distributions that support multiple financial goals such as college savings or second homes
- Available for 1099 employees, RSUs, LTIPs, Salary and Bonus
- Not meant for all employees. Generally top 10% or less.
- Tax deferral may not be available to owners
- Administrative Costs
- Sophisticated Plan designs are not for all employers
As independent advisors affiliated with LPL Financial, Cash Balance Plan Solutions offer tailored solutions to effectively manage the complexities and liabilities of nonqualified deferred compensation plans. Through our strategic partnerships, we’re committed to delivering a seamless, high-quality plan experience that simplifies management and maximizes value.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.