Nonqualified Retirement Plans

What this video covers

• Why nonqualified plans intentionally discriminate in favor of key executives, and how this distinguishes them from qualified plans subject to nondiscrimination rules
• The qualified versus nonqualified comparison across IRS approval, Employee Retirement Income Security Act (ERISA) coverage, contribution limits, portability, and creditor protection
• Why nonqualified plans are not portable and cannot be rolled over to an individual retirement account (IRA) or any qualified plan
• The three main types: deferred compensation plans, supplemental executive retirement plans (SERPs), and excess benefit plans
• Why SERPs are supplemental layers on top of qualified plans, not replacements, and why they lack Pension Benefit Guaranty Corporation (PBGC) insurance
• The defining risk that nonqualified assets remain the employer's general assets, making the executive an unsecured creditor in bankruptcy
• The critical distinction between rabbi trusts (no creditor protection, tax deferred) and secular trusts (creditor protected, immediate taxation)