Non-qualified plan design

[Eve Sav]

Designing a NQ Plan to replace a frozen DB benefit. Client is asking us to get information about personal assets of the participants to off-set the benefit that will be funded by company contributions to NQ Plan. We understand the logic behind reducing NQ benefit by social security, or other benefit programs of the employer. However, we think is is unusual to essentially penalize those who have aggresively and histroically saved for themselves, and have the company make up for the bad habits of those who have saved nothing or little personally.

Looking for some input from the benefits community about whether any of you have ever seen such an offset, and how common these may be. Anyone??

[Mark Whitelaw]

No ... in 25 years of designing NQ plans, never have personal assets been used as an offset.

Quite common that employers have their NQ consultant interview the mgmt team, get a feel for personal financial needs, NQDC security concerns, etc. to help build a meaningful design across the team ... any personal finanicial information shared by the individual is confidential between the consultant and the individual ... nothing shared with the employer.

Only personal variable I typically see is tobacco and sex ... defined contribution individually owned institutional insurance programs where a dollar of contribution builds greater total cash management values for nonsmokers and females.