NQDCs – Funding and Forfeiture

John F. Dini — Mon, 13 Apr 2026 17:40:53 +0000

In our article on March 20th, we discussed Non-Qualified Deferred Compensation (NQDC) plans as a tool to compensate key employees for achieving long-term goals. One component of such plans is the fact that they are frequently unfunded and legally considered an unsecured promise to pay. Nonetheless, both plan sponsors and recipients often want a funding mechanism to set aside assets, manage cash flow, or hedge the liability. In addition, employers typically want conditions under which they can rescind the plan for cause, including failure to achieve the objectives the plan was designed to incentivize. Funding Mechanisms For cash-based plans, there are four common ways to ... Read more

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NQDCs – “Let Me Count the Ways”

adminex — Fri, 20 Mar 2026 15:00:53 +0000

Non-Qualified Deferred Compensation (NQDC) plans are a powerful tool for incentivizing and retaining key employees. They offer virtually unlimited flexibility in methodologies, objectives and rewards to suit a company’s strategies and goals. What is “unqualified?” Quite simply, NQDCs are discriminatory. Some owners shy away from that term, but discrimination isn’t automatically illegal. Illegal discrimination in the workplace is when an employer or manager treats an employee unfairly due to their race, color, religion, sex, national origin, age (40 or older), disability, or genetic information.  Non-qualified plans discriminate because they aren’t offered to everyone. The Employee Retirement Income Security Act (ERISA) sets standards for employee benefits. Retirement ... Read more

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Non-Qualified Deferred Compensation Archives - Your ExitMap

NQDCs – Funding and Forfeiture

NQDCs – “Let Me Count the Ways”