Why Today’s Organizations Offer Deferred Compensation Plans

Why Today’s Organizations Offer Deferred Compensation Plans

Fulcrum Partners Deferred Compensation News

Based on 2018 research results1, published and released by Principal® earlier this year, employers recognize that competitive benefit offerings remain key in attracting top talent. In a job market that can be tight and highly competitive, employers are looking for ways to recruit and retain key employees.

Principal’s research shows that retaining and motivating key employees, along with restoring a company’s qualified plan contributions, are leading reasons employers choose to make contributions to an employee’s plan. In fact, since 2015, of the employers surveyed, the number that see deferred compensation as a means to provide a competitive benefits package has increased by fourteen percentage points. Plus, fifty-four percent of the surveyed employers are choosing to make contributions to the retirement plans of key employees.

Top Reasons Why Organizations Offer Deferred Compensation Plans:

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91% and 80% icons
  • 97 percent of employers surveyed desire to provide a competitive benefits package when recruiting top talent.
  • 94 percent of organizations surveyed want to help participants save for retirement beyond qualified plan limits.
  • 91 percent of organizations surveyed offer deferred comp plans as a way to help retain key employees.
  • 80 percent of employers surveyed see offering a deferred comp plan as a way to help their key employees manage current taxation.

Just as importantly, eighty-eight percent of employers identified that they either are somewhat concerned or are very concerned about losing key employees to their competitors. Likewise, sixty-seven percent of the employers reported they either are somewhat concerned or are very concerned about attracting key employees in the future.

Lastly, another significant insight is this: within the surveyed group, the number of employers making changes to their plan to reduce costs continues to decrease.

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More about Deferred Compensation Plans

1 The 2018 Principal Trends in Nonqualified Deferred Compensation report is an online survey of 271 NQDC plan sponsors conducted between June 25 and July 23, 2018. Principal National Life Insurance Company and Principal Life Insurance Company, Des Moines, Iowa 50392-0001

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