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View More Press Releases by PSCA [Plan Sponsor Council of America]

Press release:

PSCA Survey Finds a Shift in Focus for Non-Qualified Deferred Compensation Plans

Issued by: PSCA [Plan Sponsor Council of America]

Date: Aug. 29, 2019

The goal of offering a plan to employees seems to have shifted from attraction and retention of top talent to helping employees save more for retirement

Chicago (August 27, 2019) - The industry-leading benchmark study of non-qualified deferred compensation (NQDC) plans finds a shift in emphasis for an increasingly critical benefit for key employees.

That was among the key findings of the Plan Sponsor Council of America (PSCA) 2019 Non-Qualified Deferred Compensation Plan Survey, a follow-up to its 2018 study. The survey facilitates dialogue within the industry while providing insight into common and best practices of deferred compensation plans. PSCA is part of the American Retirement Association (ARA).

Employers have long provided access to NQDC plans to their management team and certain highly-compensated employees. Participants value the unique tax preferences and wealth accumulation opportunities available through a NQDC plan.

The survey of NQDC plan sponsors - the only independent source of plan benchmarking data on NQDC plans for sponsors and advisors - generated 162 responses from a diverse group of employers, including 127 organizations that currently sponsor an account-balance NQDC plan for executives. The respondents represent a wide variety of industries, including a significant number of large employers, those with more than 5,000 employees.

"Properly deployed and communicated, these plans significantly enhance the value of compensation executives actually receive, after taxes," said Jack Towarkicky, PSCA's Executive Director. "They provide employers a flexibility in focus and funding not typically found with programs subject to ERISA's strictures."

The survey found that on average, five percent of employees are eligible to participate in the NQDC plan, and about half of those that are eligible to participate do so. Organizations that provide a non-matching contribution experience much higher rates of participation, approximately 63%, relative to organizations with no employer contribution, where participation rates fall below 30%.

The full survey is available for purchase at https://www.psca.org/2019NQDC_report. For more information, contact Hattie Greenan at hattie@psca.org.

About the Plan Sponsor Council of America
The Plan Sponsor Council of America (PSCA), part of the American Retirement Association, is a diverse, collaborative community of employee benefit plan sponsors, working together on behalf of millions of employees to solve real problems, create positive change, and expand on the success of America's voluntary, employer-sponsored retirement system. With members representing employers of all sizes, PSCA offers a forum for comprehensive dialogue. By sharing our collective knowledge and experience as plan sponsors, PSCA also serves as a resource to policymakers, the media, and other stakeholders as part of its commitment to improving retirement security for millions of Americans. For more information, visit psca.org.

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View More Press Releases by PSCA [Plan Sponsor Council of America]


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