May be a basic question about NQDC distributions..

[Guest Rdubs]

Do most NQDC plans provide full payout to the participant upon termination? Since participants are not eligible to roll funds over to an IRA or another NQ Plan I would suspect this is the case, however was wondering if some NQDC plans make participants stay in the Plan until their elected distribution date rolls around?

[Mark Whitelaw]

Yes. Most plans are lump-sum payout if you leave for any reason prior to retirement. Sometimes, in rare cases, I have seen where your money stays at the company to what would have been your retirement age. Most HR and CFO's don't want to track terminated employees, continue to carry a contingent liability, and want the person paid out upon termination. Many of the new plans I've reviewed call for lump-sum regardless of whether the person stays to retirement or not.

[TCWalker]

As far as roll-overs, the new employer may offer an exec a new NQDC immediately which be be used to create a current comp offset against the former employer NQDC distribution.