Why High-Earning Executives Value Nonqualified Plans
The video explains that a nonqualified deferred-compensation plan (NQDC) is a selective savings vehicle designed for roughly the top 10 percent of your workforce—those who routinely bump against 401(k) or 403(b) contribution ceilings. Because NQDCs are exempt from many IRS limits and most ERISA nondiscrimination rules, sponsors can:
Lift the lid on deferrals and matches. Participants may defer a much larger share of salary, bonuses, or commissions, while employers can layer on uncapped matching or discretionary credits.
Customize eligibility and vesting. Plans can target only highly compensated employees and use bespoke vesting schedules to sharpen retention incentives.
Offer broader investment choice and flexible payouts. Recordkeepers often mirror or expand the qualified-plan menu and let executives schedule in-service or post-retirement distributions that align with future cash-flow needs and tax planning.
Sponsor Benefits at a Glance
Recruitment & retention edge in competitive talent markets
Minimal ERISA reporting—no Form 5500 filing, no annual audit
Administrative efficiencies when the NQDC rides on the same record-keeper platform as the qualified plan
Key Trade-Offs to Weigh
Assets remain unfunded and subject to corporate creditors, so financial-health monitoring is critical.
Plan design must respect Section 409A timing rules for deferral elections and distributions to avoid adverse taxes.
Because payouts are taxable as ordinary income to participants, sponsors should evaluate whether future tax-rate trends support the plan’s appeal.
When Demand Peaks
Interest in nonqualified plans typically rises when top tax brackets are expected to increase, markets are strong, and unemployment is low—all factors that push executives to seek additional, tax-efficient savings space.
CAPTRUST’s retirement plan clients benefit from the firm’s centralized model, which is supported by a deep bench of highly specialized talent. Learn about the suite of resources CAPTRUST’s institutional advisors leverage to create a best-in-class client experience, including investment manager due diligence, customized participant advice, vendor analysis, and the latest in cybersecurity.
Pete outlines the essential steps fiduciaries must take to find missing participants and provides key takeaways for navigating a Department of Labor investigation. The discussion covers:
Required Search Steps: Learn the four minimum steps the DOL mandates that plan fiduciaries must take before ceasing efforts to locate participants—including the use of certified mail, reviewing related plan records, contacting beneficiaries, and leveraging free online search tools.
Fiduciary Responsibility: Understand that reuniting participants with their money is a critical part of your fiduciary duty, as benefits must be paid on time and required disclosures and minimum distributions must be made.
Navigating DOL & IRS Guidance: The webinar details what happens when participants cannot be found and where plan sponsors can find additional information from the DOL and IRS to remain compliant.
The CAPTRUST Advantage: Discover how CAPTRUST can help you navigate these requirements, partner with your record keeper, and develop a robust plan for locating missing participants.
Ultimately, finding missing people and reuniting them with their money is your fiduciary responsibility, and this webinar will provide you with the information you need to stay on top of this important task.