Obviously, no body asked the marketing people before discovering that one. Who on earth thought up the title 'non-qualified deferred compensation'? Oh, it is descriptive ok. Dig up more about home business by browsing our pushing site. But who wants something 'non-qualified'? Do you want a 'non-qualified' doctor, attorney, or accountant? What is worse is deferring compensation. Just how many people desire to work to-day and get paid in five years? The issue is, non-qualified deferred compensation is a good idea; it only includes a lousy name.

Non-qualified deferred compensation (NQDC) is a powerful retirement planning tool, especially for owners of closely held corporations (for purposes of this article, I'm only likely to deal with 'C' corporations). NQDC plans aren't qualified for 2 things; some of the income tax benefits afforded qualified pension plans and the employee protection provisions of the Employee Retirement Income Security Act (ERISA). What NQDC plans do offer is mobility. Great gobs of mobility. Mobility is some thing capable plans, after decades of Congressional tinkering, absence. The loss of some tax benefits and ERISA provisions might seem a very small price to pay when you consider the numerous benefits of NQDC programs. My co-worker learned about nerium legit by searching Yahoo.

A NQDC approach is a written agreement between the employee and the corporate employer. The contract covers payment and employment which is offered in the future. The NQDC agreement gives to the worker the employer's unsecured promise to cover some future advantage in exchange for ser-vices to-day. The promised future benefit might be in one of three common kinds. Some NQDC plans resemble defined benefit plans in that they promise to pay the worker a fixed dollar amount or fixed percentage of income for-a period of time after retirement. A different type of NQDC resembles a precise contribution plan. A fixed volume goes into the employee's 'account' every year, often through voluntary salary deferrals, and the employee is eligible for the balance of the account at retirement. The ultimate sort of NQDC program offers a death benefit to the employee's designated beneficiary.

The key advantage with NQDC is mobility. With NQDC ideas, the employer may discriminate readily. To read additional info, people may check out: nerium legit. The company could pick and choose from among employees, including him/herself, and benefit just a select few. To discover additional info, we recommend you check-out: online marketing critique. The company can treat those chosen differently. The advantage stated will not need to follow some of the principles connected with qualified plans (e.g. the $44,000 for 2006) annual limit on contributions to defined contribution plans). The vesting schedule may be regardless of the manager would like it to be. By utilizing life-insurance products, the tax deferral feature of qualified plans can be simulated. Effectively written, NQDC plans don't end up in taxable income to the employee until payments are made.

To obtain this flexibility the employee and employer should give some thing up. The company loses the up-front tax deduction for the contribution to the plan. However, the manager will receive a deduction when benefits are paid. The worker loses the security provided under ERISA. However, frequently the staff involved is this concern is mitigated by the business owner which. Also you will find methods available to supply the non-owner employee having a measure of security. Incidentally, the marketing guys have gotten your hands on NQDC plans, therefore you'll see them called Supplemental Executive Retirement Plans or Excess Benefit Plans among other names..

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