How Deferred Comp Plans are Funded

Employers offer Nonqualified Deferred Compensation (NQDC) plans to help employees save for retirement or other asset accumulation needs on a tax-favored basis. NQDC plans allow employees to make up for limitations placed on qualified plans. NQDC plans allow for great flexibility in design and help employers recruit, retain, reward and retire top talent. NQDC plans can also motivate the executive’s job performance.