NQDC plans are a creative way for employees to save for retirement by deferring part of their salary. What’s more, they offer flexible funding options, including life insurance, which can provide potential cost recovery and tax benefits for your business.
With NQDC plans, you get selective participation, limited ERISA rules, tax-deferred growth, and additional retirement savings beyond the limits of qualified plans. You can also choose from three types of non-qualified plans for executives, including Voluntary Deferral Plans, Supplemental Executive Retirement Plans (SERPs), and 401k Mirror Plans.
But wait, there’s more! Did you know that cash-value life insurance can be used as an informal funding option for NQDC plans? That means the policy’s cash value can accumulate without any current taxation to the business, providing potential tax advantages and cost recovery. Plus, the business can access the policy’s available cash surrender values tax-free to pay the promised benefits to the executive, and the life insurance policy death benefit proceeds are received by the business income tax-free, providing a pre-retirement death benefit to the executive’s heirs.
NQDC plans are perfect for businesses that want to provide additional benefits to key executives or employees, enticing them to stay with the company. So, don’t miss out on this exciting opportunity to take your business to the next level! Reach out to me today to discover the ideal NQDC plan tailored to your company and its employees.
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