'Most Admired' Firms Heavy into NonQual Plans

January 8, 2007 (PLANSPONSOR.com) - A new study by a Greensboro, North Carolina-based executive benefit consultant has found virtually all of the 276 "most admired" US firms it studied offer at least one non-qualified plan as a way to retain key managers.

A news release from The Todd Organization about its study said 92% of respondents reported including a non-qualified plan in their executive benefit package, and 81% p rovide a company contribution to at least one plan. The consultant looked at shareholder proxies and other public documents from the public firms given the “most admired” title by Fortune Magazine.

According to the news release, other study findings included:

  • 86% of companies offer voluntary deferred compensation programs;
  • 64% offer one or more supplemental executive retirement plans (SERP).

“Today more than ever companies want to be able to benchmark their executive benefits programs and know where they stand in relation to peers and competitors,” said Ward Russell, president of The Todd Organization, in the news release. “It has been our experience that well managed companies see properly structured and well managed non-qualified retirement plans as an important tool that can help to cost effectively retain quality executives while boosting shareholder value.”

According to the Todd Organization’s study, types of non-qualified benefits and the number of “most admired” firms offering them were:

Deferred Compensation

  • Voluntary Deferrals, 86%
  • At Least One Company Contribution, 65%
  • 401(k) Match Restoration, 48%
  • Fixed Rate with Yield above Statutory Rate, 18%
  • Company Stock is One of Choices, 15%

Defined Benefit SERP

  • Annual Accrual-Based Formula, 47%
  • Target Benefit Formula, 16%
  • Fixed Amount Formula, 4%

Account Balance SERP

  • Cash Balance, 11%
  • Formula-Based Discretionary Contributions, 2%
  • Other Discretionary, 2%

Founded in 1957, The Todd Organization offers consulting in the design, financing, and administration of non-qualified retirement plans and other executive benefits. More information is at http://www.toddorg.com .