Providing Solutions
Nonqualified Deferred Compensation (NQDC) Plans backed by Rabbi Trusts enable an employer to provide rewards for key executives and top producers as well as a means for deferring taxable income. Plan participants are able to defer income recognition while attaining some assurance that funds will be available to make the promised payments. As a non-qualified deferred compensation plan, Rabbi Trusts avoid many of the complex and administratively burdensome requirements that govern qualified plans under ERISA and the Internal Revenue Code. In addition, they can be tailored with great flexibility to fit precise objectives and to target for a specific employee or groups of employees.
Advantages
The key advantage of NQDC plans is that they allow the employer to attract high-caliber employees. NQDC plans are designed to give the employer the ability to target contributions to select key employees and are flexible to complement other salary and benefit programs. Key executives also benefit from the plan, which provides additional retirement savings, income deferral on a pre-tax basis and allows for in-service distribution. |
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