The typical qualified plan gives employees the same formula for accumulation of retirement benefits regardless of their performance, position at the company, or different economics.
Ironically staff have the ability to accumulate a higher % of pre - retirement income due to the limitations imposed by ERISA on contributions for your highly compensated employees.
Non-Qualified Deferred Compensation Plans (NQDC) provide the flexibility to provide "who gets what" without mandatory inclusion of all other staff. This open architecture offers Owners the ability to level the playing field for their KEY PERSONNEL.
NQDC gives your high income earners the ability to defer compensation and plan their taxable event according to their individual needs.
There are no yearly restrictions on corporate or employee discretionary contributions.
They do not have to deal with the cost of early-withdrawal penalties through in-service accounts (409A regulations are still applicable).
Retirement compensation that adapts to the needs of high performing employees makes it easier to attract strong employees and please top executives so they want to stay.
Businesses can offer special retirement options to executives as they see fit.
Different levels of retirement benefits can be created to meet varying needs of the employees and company.
The sum provided through NQDC can help balance out the qualified plan payment that is not met because of testing problems.
Customizable vesting schedules increase company loyalty of top talent.
The NQDC is an asset of the company helping the balance sheet