Most non-qualified deferred compensation (NQDC) plans offer participants a menu of investment options – and most match their DC plan lineup, according to a new survey.
More than half (57%) offering the same as the menu as offered in their qualified DC plan, according to the Plan Sponsor Council of America’s 2016 Non-Qualified Deferred Compensation Plan Survey.
The survey found that the most common reasons employers offer a NQDC plan are:
- 58% - to offer a competitive benefit package to key employees
- 38% - to retain eligible employees
Other findings:
- Nearly half of plans (48%) allow both employee and employer contributions, while 29% allow only employee contributions, and about a quarter (23%) allow only employer contributions.
- 71% of plans allowing employer contributions make a match, the most common being a fixed match.
- 42% offer in-service distribution options.
- Two thirds allow participants to choose installment payments in addition to lump sum distributions.
- Half allow their participants to “re-defer” distribution elections as permitted by Section 409A.
The survey of NQDC plan sponsors, conducted earlier this year, generated 303 responses from employers who either offer a non-qualified plan now or intend to do so within the next year. Respondents were employers of all sizes and industries (ex. manufacturing, services, distribution, retail, technology, financial services, and health care).
The full survey is available for purchase at www.psca.org/research.
