Nonqualified Deferred Compensation

Deferred Compensation: A Fresh Perspective

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Deferred Compensation: an idea that began with Sugar Ray Robinson photo credit: Jean Scheijen

A Fresh Perspective on Deferred Compensation

Forbes Magazine contributor, Steve Parrish, took an interesting look at the benefits of deferred compensation in an article titled, “Delaying Today’s Compensation Could Pay Off In The Future.”

Parrish  explained, in simple terms, what distinguishes qualified plans from nonqualified plans. He pointed out that many workers may not be familiar with either concept and that those who are aware of nonqualified deferred compensation plans, may incorrectly believe such plans to be relevant to only earners at the highest levels.

As the article’s author identifies, the idea behind delayed compensation is hardly new:

“Nonqualified deferred compensation (NQDC) plans have been around since the legendary boxer Sugar Ray Robinson signed a deal with the International Boxing Club of New York in 1957. And yet this popular compensation planning tool is still misunderstood.”

See the December 7, 2015 edition of Forbes/Entrepreneurs for Steve Parrish’s complete article, including  case studies on these four earning scenarios:

  • A professional-level employee supplements his retirement income
  • A key employee wants ‘a piece of the company pie’
  • ‘Tier Two’ employees get their own incentive plan
  • A tax-efficient succession plan for father and daughter