Trends in nonqualified deferred compensation plans

Group of people talking about trends in nonqualified deferred compensation plans.

An effective benefit in the race for top talent

Nonqualified deferred compensation plans continue to be an effective benefit. Read what employers and key employees have to say about it.

The report from Principal® (research conducted in 2016 and published in 2017) points out key trends in the deferred comp market. It also provides an inside look at what plan sponsors and participants like most about the plan and why it’s important to them. A presentation of the findings is also available. 

Take their word for it – key takeaways

Deferred comp is key for retirement savings

  • Employers want to help their top talent save beyond qualified-plan limits. 
  • Key employees expect plan benefits to represent part of their retirement income. 

Deferred comp helps recruit, reward and retain

  • Key employees consider this benefit important in deciding to take a new job or stay with a current employer.
  • Most employers are concerned about losing key employees to competitors – this plan adds value to their benefits package. 

Deferred comp provides flexibility and choice

  • Employers want plans that are simple and cost efficient. 
  • Key employees determine their deferral amounts based on savings goals, tax rates and current income needs.
Read the latest research

Get an inside look at employers’ and key employees’ viewpoints and experiences with a deferred comp plan. 

Between August 29 and September 12, 2016, Principal® conducted an online survey with employers having existing nonqualified defined contribution plans and key employees who were eligible to participate in a nonqualified plan with Principal. A total of 298 completed surveys were received from employers and 2,420 from key employees.

Key employees were screened based upon whom:

  • Were currently participating in a deferred comp plan and, for those who participated in a defined contribution-type of plan design, had a plan balance of at least $10,000.
  • Were at least 35 years old.
  • Had an individual income of $110,000 or more.
  • Had an executive job title.
  • Were not working for a government agency, school district, community hospital or public university.