Non-Qualified Deferred Compensation Plan
Ongoing competition to attract and retain top-performing executives requires
competitive benefits. Designed to provide pre-tax savings opportunities and supplemental retirement benefits to a select group of executives, a Non Qualified Deferred Compensation Plan (NQDCP) plan is a crucial component of a wellrounded executive benefits package.
Our Non Qualified Deferred Compensation Plans can provide you with all the components you need to offer a total retirement approach to your key employees that incorporates the benefits of an NQDC plan using an integrated team approach. Plan sponsors benefit from the combined expertise of our Non Qualified Deferred Compensation Plan specialists.
Employer Intends to Retain The Policy
• Approach – Traditional Split Dollar; the employer’s share of cash values and death benefit is the entire cash value or if greater, premiums paid by the employer.
• Ownership – Endorsement method; employer owns the policy subject to endorsement pertaining to the employee’s share of the death benefit.
• Premium Split – Employer-Pay-All; the employee pays income tax on the “economic value” of his or her share of the death benefit. The economic value (benefit cost) is normally much lower than the policy premium and is measured by a government table
or the insurer’s lower term insurance rates.
• Life Insurance– Any type of permanent life insurance policy can be used.
• Retirement Options – The employer can:
A) Continue to maintain the policy and ultimately recover the costs
of the deferred compensation plan from the death proceeds.
B) Surrender additions or borrow from the policy to help pay the
promised benefits.
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Establish a Non Qualified Deferred Compensation Plan that provides a tax-free pre-retirement death benefit to the employee’s spouse rather than taxable salary continuation
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