Voya Financial has announced the launch of new distribution portfolios for its nonqualified deferred compensation (NQDC) plans.
Developed with Voya Investment Management’s Multi-Asset Strategies and Solutions team, the models are specifically designed for individuals looking to closely align their NQDC distribution dates with the investments in their plan.
According to the announcement, the distribution portfolios include four professionally managed asset allocation options providing flexibility for individuals to elect scheduled distributions using one or more investment time horizons with distribution windows of 3, 5, 8 or 10 years.
“We know target-date funds (TDF) are one of the most popular investment choices when it comes to one’s 401(k) plan, so we wanted to structure a solution with similar benefits of a TDF but tailored to the needs of NQDC participants,” notes Kirk Penland, Senior Vice President of Nonqualified Markets at Voya Financial. “Rather than providing a distribution that is tied to a retirement date as you would see in a TDF, the distributions are aligned to dates that one has selected to receive their nonqualified plan savings.”
Penland further explains that this offers several advantages for those looking to tie distributions to certain life stages beyond retirement, such as saving for a child’s education, a new house, or any short-, medium- or long-term goals.
As a result, distributions can be structured in various ways—from payments over a specific time period to a one-time lump-sum payment. Additionally, since most deferred compensation plans also allow individuals to choose investment options for their deferred compensation balances, in some cases, each year’s balance can be invested differently, the announcement explains.
