Deferred Compensation Plan Funding

Deferred Compensation Plan Funding

Deferred Compensation

Non-qualified Deferred Compensation Plans (NQDC)

NQDC plans are designed to provide extra retirement benefits for deferred compensation key employees above and beyond what can be provided with qualified pension, profit sharing, or 401(k) plans. You can choose which employees are to be covered, the amount of benefit to be provided, and whether the benefit is subject to a vesting schedule. In fact, you can use this type of plan just like it is used by large, publicly-owned corporations – to reward and attract employees with “golden handcuffs.”

Book a Phone Appointment now

CLICK THE BOOKNOW Button Above

NQDC plans are ideally suited to employers that:

• Want to provide additional retirement income to select, highly compensated employees

• Have a stable, mature corporation that is likely to be in existence to pay the retirement and/or death benefit as promised by the NQDC.

• Have key employees who have maxed out their qualified retirement plans

deferred compensation, life insurance These plans can be, and often are, supported by life insurance that is paid for and owned by the business. Life insurance is a safe way to provide income to key employees and their families. The living benefits from the accumulated cash value can be an effective way to fund retirement income for the employee, while the death benefit can be paid to the employee’s family when the individual dies. In addition, the plan can be structured so that you recover the premiums you paid into the policy (requires a higher death benefit amount).

The retirement benefit or death benefit is tax deductible to the company when paid out and taxable to the employee or his or her family when paid out as a salary continuation retirement benefit.

Please call us at 866-392-INFO (4636)

This plan is an agreement between you and a key employee that allows you to defer a payment of compensation (annual bonuses, or a percentage of salary) until a designated time such as at retirement. Plans are funded by trust accounts or life insurance policies and plan specifics can be structured to meets the individual needs of an employee. Compensation is tax-deductible by you when its paid – a good plan to offer in lieu of employee stock options, or to discourage a valued employee from resigning.

The information provided is not written or intended as tax or legal advice. Our representatives are not authorized to give tax or legal advice. Individuals and business owners are encouraged to seek professional advice from their own tax or legal counsel.