Survey Data - Nonqualified Plans
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2020.02.27 GAO Report: IRS and DOL Should Strengthen Oversight of Executive Retirement Plans.
- "What GAO Recommends
- GAO is making four recommendations, including that IRS improve its instructions for auditing companies that offer these plans, and that DOL consider modifying reporting by companies to better describe participants in these plans."
- Rationale re DOL recommendations:
- "The Secretary of Labor should explore actions the agency could take to help companies prevent the inclusion of rank-and-file employees in executive retirement plans and determine which, if any, actions should be implemented."
2020.02 Trends in Nonqualified Deferred Compensation: 2019 research results (Principal).
- How Participants View Nonqualified Plans
- "Retirement remains a top priority. Retirement continues to be the #1 reason to participate in the plan, and a top reason for employees to increase their contributions."
- "Participants are confident about retirement. 92% of participants are confident they’ll have enough to live comfortably in retirement, and 90% think the plan is important in reaching retirement goals."
- Most plan participants understand the plan
- 91% Plan investment options
- 87% Options for making deferral elections
- 84% Ability to make changes to elections
- 80% Events for receiving distributions from the plan.
2019.09.09 Prudential-PLANSPONSOR Benefits survey.
- Eligibility: 48% of surveyed participants had a base salary below $175,000 per year. That percentage was 68.9% per 2017 survey results.
2017. Fulcrum Partners LLC: Trends in Nonqualified Deferred Compensation.
- "It’s all about retirement. The trend continues to show that a NQDC plan is important in helping participants reach their retirement goals. In fact, progress toward their retirement savings goal continues to be the primary reason to participate, and plays the largest role in deciding how much to contribute."
- "Top reasons these plans are valued
- It’s still about saving for retirement. The ability of deferred comp plans to help key employees save for retirement continues to be the most important role of the plan and a main reason for participating.
- Retirement income source. Half of participants view the plan as a source of income to be spent down during the early years of retirement. More than 20% of participants say that the plan will provide 25% or more of their retirement income. One in ten participants view the plan as their number one retirement income source."
- Characteristics of all participants in a Principal nonqualified deferred comp plan:
- Size of employer 501 - 1,000 employees
- Salary range $150K - <$300K
- Annual employee income
- 30% [of participants] below $150k
- 48% [of participants] between $150k - $300k
2017 Newport Group Current Practices in Non-Qualified Deferred Compensation.
- Eligibility: "Generally, most plan sponsors use a minimum range of $125,000–$150,000 as the low end of the total compensation level. In addition, the maximum number of eligible participants in an NQDC plan is typically held at no more than 10%–15%."
- Minimum Total Compensation for Eligibility:
- Less than $150,000 for 40% of surveyed companies
- [D]ata from 113 public and private companies
- 96% have over 1,000 employees, while 70% have at least 5,000 employees.