As 2019 wound down, Plan Sponsor published a “2019 Survey” report that focused on nonqualified deferred compensation plans (NQDC plans).
Critical points the article addressed included the following trends and observations:
- A good NQDC provider can offer services beyond the retirement plan.
- During periods when unemployment is low (as it currently is) the historic message of using the right plan to recruit, retain, and reward becomes primarily a message of retaining and rewarding.
- Companies of all sizes may be especially receptive to the use of long-term incentive plans in the absence of, or in place of, stock rewards for participants.
Beyond the NQDC Plan
Among the experts interviewed for the Plan Sponsor article was Phil Currie, Managing Director & Partner at Fulcrum Partners. Phil heads both the Fulcrum Partners office in Newport Beach, California and the office in Salt Lake City, Utah.
Phil observed, “…NQDC plans may include a company contribution or a company match on deferrals contribution. Participation in the plan tends to be greater when there is a company contribution than when there isn’t.”
Emphasizing financial wellness, Phil also pointed out, “People assume that those who make a lot of money (always) have their financial house in order, but that is not true at all. We do one-on-one enrollment. An employee may have had access in a NQDC plan for years but didn’t participate because he didn’t understand it. Participant education and communication is extremely critical to the success of a plan.”
Another important point Phil raised is that providers should be able to offer funding vehicles and investments if the plan sponsors choose to fund the NQDC plan, including being able to provide asset-liability balancing, whether the plan is unfunded or funded.
You can read the full article on the Plan Sponsor website (www.plansponsor.com). You can learn more about the opportunities of nonqualified deferred compensation plans by contacting the team at Fulcrum Partners.
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