Deferred Compensation News and Updates

Deferred Compensation News brings you the latest information and insights on 409A nonqualified deferred compensation; institutional COLI, BOLI, and ICOLI; tax-and cost-efficient non-COLI funding strategies; low-cost tax managed non-COLI asset/liability designs; executive benefits benchmarking; succession planning and timely issues of executive pay and benefits. 
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August 10, 2021

401(k) Nondiscrimination Testing Refunds

PLANSPONSOR

Has your qualified plan nondiscrimination testing resulted in refunds to any highly compensated employees (HCEs) during the past five years? This is the question posed to 282 public and private for-profit companies, during the 2020 Annual Survey conducted by Newport Retirement Services and PLANSPONSOR.
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August 02, 2021

NQDC Plans and Plan Participant Eligibility

PLANSPONSOR

One of the first questions organizations explore when they implement or update a nonqualified deferred compensation plan (NQDC) is who is eligible to participate in the plan. Data from the Newport/PLANSPONSOR Executive Benefits Survey, 2020 edition, shows that of the 282 corporate respondents to the Survey, the greatest percentage of companies set their threshold for NQDC Plan participation at $150,000 per year in compensation. The Survey further showed that compensation and job position continue to be the most common criteria that companies use to determine plan eligibility. Organizations indicating compensation (base salary or total compensation) as their key point of plan participant eligibility determination, account for 37 percent of the responses. The response of 37 percent marks an increase of 6 percent over the findings from the previous year’s survey. Position and or job title accounts for 36 percent of the responses, which is an increase from the 22 percent who identified these same factors as their key deciding point in last year’s survey. Additional Marketplace Insights Regarding Plan Participant Eligibility Compensation will always be an important benchmark used to gauge which employees may participate in an NQDC plan, and to what degree. However, using position, title, or job grade
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June 11, 2021

Non-Qualified Deferred Compensation Plans: Class Year or Account Based?

PLANSPONSOR

Last year, Newport Retirement Services and PLANSPONSOR published an insightful executive benefits report based on a survey of 282 public and private for-profit companies, representing a cross section of industries. Among the topics the survey addressed was that of “class year” or “account based” plan design for the companies’ nonqualified deferred compensation plan (NQDC), of which, 98 percent of the companies participating in the survey currently offer.
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May 07, 2021

Cybersecurity for Your Defined Benefit Plan

PLANSPONSOR

Last month, the U.S. Department of Labor (DOL) issued a press release aimed at defined benefit plan sponsors, plan fiduciaries, record keepers, and plan participants. For the first time, the DOL’s Employee Benefits Security Administration issued cybersecurity guidance.
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December 09, 2020

Here’s Why Employers Offer Nonqualified Deferred Comp Plans

PLANSPONSOR

Nonqualified deferred comp plans remain a powerful tool to help Highly Compensated Employees (HCEs) bridge the retirement savings gap.
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August 25, 2020

Deadline for RMD Rollback Under CARES Act is August 31

PLANSPONSOR

Taxpayers who have already taken their required minimum distribution, RMD, for 2020, have the option for an RMD Rollback under the CARES Act if taken by August 31, 2020. The intention of this option is to provide tax relief for those who took their required RMD prior to the Coronavirus Aid, Relief, and Economic Security (CARES) Act becoming law on March 27, 2020 and wish to ‘undo’ their action.
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August 07, 2020

What is Nonqualified Deferred Compensation and Why Do Companies Use It?

PLANSPONSOR

A nonqualified deferred compensation plan (NQDC) is an unsecured promise made by an employer to pay compensation to key employees at a prespecified time in the future or upon the occurrence of a predetermined event. An NQDC plan is also one of the most powerful tools available to employers for recruiting, retaining, and rewarding key employees.
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Featured image for “Partisan Politics and Proposed ESG Investing Restrictions by the DOL”
July 21, 2020

Partisan Politics and Proposed ESG Investing Restrictions by the DOL

PLANSPONSOR

Proposed Department of Labor regulations on ESG investing (environmental, social, and governance) by retirement plans have drawn criticism from thirteen members of the US Senate. In a comment letter dated July 15, 2020,  Independent party member, Senator Bernie Sanders, along with 12 Democratic Senators*, expressed “deep concern” over the DOL’s  proposal “discouraging retirement plan fiduciaries from considering environmental, social, or governance (ESG) criteria in their investment decisions relating to ERISA-governed** retirement plans.”
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