Non-Qualified Deferred Comp

The Future of Business Planning

Our Non-Qualified Deferred Compensation (NQDC) solution gives you a competitive edge by offering tax-free retirement income, living benefits, and legacy value to key employees all while protecting your business.

Aligning Financial Strategy With Expertise

The Problem:

The high cost of employee turnover

Many businesses invest heavily in their employees, only to lose them to competitors. The cost of training a new employee is estimated to be around $200,000. Traditional retirement plans like a 401(k) are often not enough to retain top talent. Furthermore, money taken from a 401(k) is taxable, which can reduce its appeal. Business owners need a more powerful solution to build loyalty and protect their investment in their people.

The Breakthrough:

The Golden Handcuff for Talent Retention

Our Non-Qualified Deferred Compensation (NQDC) plan is a powerful solution to attract and retain key employees. Unlike a 401(k), this plan creates "golden handcuffs" by requiring employees to vest for 7-10 years to receive their full benefits. This ensures your most valuable people stay with your company, protecting your investment and preventing them from leaving to compete against you. The NQDC plan offers employees a much higher, tax-free income in retirement.

How It Works:

A Capital-Efficient Solution

Our approach minimizes your company's out-of-pocket costs by using premium financing. For example, on a policy with a $54,000 annual premium, your company's out-of-pocket cost could be as low as $3,000 a year. A bank provides the financing, making this an extremely capital-efficient strategy for your business. The plan also offers significant benefits to the business itself, acting as a protected asset on your balance sheet and a powerful recruiting tool.

The Results:

Real world Impact and ROI

The Non-Qualified Deferred Compensation (NQDC) plan is designed to provide substantial returns for both the company and its employees. In a real-world case study, a company with 40 employees was able to secure a $69 million death benefit with zero medical exams. The plan's funding is strategically secured, and in one case, a company spent $1.6 million on its plan, which was less than half of what they were already spending on 401(k) matching. The plan offers a guaranteed issue, meaning an employee with stage four cancer can be covered as long as they haven't been hospitalized for three consecutive days in the past three months. The company retains ownership of the policy, so even if an employee leaves, the company still holds the asset.

Who Qualifies?

Targeting Your Most Valuable Employees

These plans are offered to a select group of employees, typically those in leadership roles or who are highly compensated. The minimum standard for qualification is a company with a strong balance sheet and at least 10 employees. An ideal candidate company would have employees with well over a $75,000 annual income. The plan can also be structured to provide a guaranteed issue death benefit of up to $5 million for a group of 100 employees. The plan's eligibility can be based on who a business owner wants to include, rather than being required for all employees. The plan can also be used to target specific employees, such as a company's senior engineers.

What's Next:

See your numbers

Want to know what Non-Qualified Deferred Compensation could do for your future? We’ll run the numbers based on your age, income, and retirement accounts, so you can see the difference for yourself.