Voya has expanded its lineup of nonqualified deferred compensation (NQDC) solutions with a more simplified offering that smaller-sized employers can add to their executive benefits package.
Dubbed “Business-ready,” the new offering is available to any size 409A (for-profit) company, but it has been designed specifically for employers with less than 400 employees, according to the firm’s announcement.
“At Voya, we continue to see a growing interest in our executive benefit solutions—so much so that in 2023 we saw a 117% increase in total plans sold in Voya’s NQDC offerings over the prior year,” noted Kirk Penland, senior vice president, Nonqualified Markets. “At the same time, we also know there is not a ‘one size fits all’ solution when it comes to building an executive’s total rewards package.”
In noting that smaller employers have unique needs, Penland adds that the solution provides those employers with an opportunity to offer a NQDC plan without the complexities of a tailored solution that many larger companies seek.
Differentiating features of the new package include the following.
A pre-built investment lineup: Offering 21 unique asset categories, including equities, fixed income (i.e. short-/intermediate-term bonds, high yield, global) and alternatives (such as real estate) managed by Voya Investment Management. With access to more funds and fund manager support—including access to different target-dates series—participants are offered diversification without an overwhelming number of options, the firm explains.
Easy implementation and administration: Providing more-streamlined plan design choices and funding options, including mutual funds and corporate-owned life insurance, as well as faster implementation and ongoing plan management tailored to employers on the smaller end of the market.
Less complexity: With a focus on providing easier plan management for both employers and their participants, Business-ready extends the core attributes of NQDC plans without the complexities of a larger custom plan, including flexible contribution and distribution schedules.
As the financial wellness needs of Americans continue to evolve, innovative compensation benefits are becoming an increasingly important way for employers to attract and reward leadership talent, Voya suggests. Consequently, more employers are looking to incorporate NQDC plans into their overall benefit offering, the firm notes.
“Many executives face unique challenges saving for retirement due to contribution limits of a traditional retirement savings plan,” observed Hunter Penland, vice president, Nonqualified Markets. “Because a NQDC plan can help address their needs, these options are becoming increasingly popular across the industry and even more so among our existing clients at Voya.”
As part of innovating its NQDC offerings, the firm also recently added Voya Investment Management’s Pomona Investment Fund, an alternative private equity product, as a new investment option. Voya also launched NQDC distribution portfolios, a “first-of-their-kind investment model,” developed with Voya Investment Management’s Multi-Asset Strategies and Solutions team and designed for individuals looking to align their NQDC distribution dates with the investments in their plan.
