Majority of Firms Report Offering NQDC Plans

February 8, 2012 ( – Eighty-three percent of firms report they offer a non-qualified deferred compensation (NQDC) plan. 

By Tara Cantore | February 08, 2012
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According to The Newport Group’s “Executive Benefits: A Survey of Current Trends,” the prevalence of these plans in the large corporate marketplace remains stable in spite of the recent economic downturn.

The Newport Group survey focuses on two main types of non-qualified plans: non-qualified deferred compensation (NQDC) plans and defined benefit supplemental executive retirement plans (DB SERPs)—as well as supplemental long-term disability benefits and other executive perquisites.

According to the survey, 51% of responding companies report having DB SERPs. These plans have seen a modest decrease in utilization over the past few years, primarily due to the expense often associated with offering these plans.

Forty-seven percent of those employees eligible for an NQDC plan elected to participate in their plan. Participation has returned to previous levels, despite a brief decline reflecting the market turmoil of recent years.

The survey results also show there is a continued popularity of diversified investment options (401(k)-type menus). However, a noteworthy trend is the increased popularity of fixed-rate options that likely reflect participant interest in investments that offer reasonable rates of return with lower volatility and risk.