With a focus on retaining key people in an organization and recruiting more experienced executives, non-profits and businesses might consider the use of deferred compensation plans that go beyond the typical 401(k).
Many businesses and non-profits have some form of qualified retirement plan that allows the business, employee or both to fund tax-deferred benefits. If anything happens to the company, these pensions and 401(k)s are protected from creditors.
But non-qualified plans can sometimes be a good solution, and can be used in addition to qualified plans, particularly when a business is facing a specific need regarding specific employees.
The biggest advantages of non-qualified deferred compensation plans compared with qualified plans are:
1. They don’t have to be offered to everyone equally.