Nationwide Financial has rolled out the Nationwide Corporate Incentive Program (TNCIP), which is designed to accommodate small- to mid-sized corporations with one or more key employees funding existing 401(k) plans to the fullest extent. The non-qualified deferred compensation program includes documents, online plan administration and trust services, according to a news media release.
TNCIP works like this: An employer and employee enter into an agreement that spells out all of the plan features, benefits, and requirements. The employee elects to defer some percentage of future compensation for a specified period of time.
Once employees elect to participate in the plan, they choose from a menu of securities that could range from the very conservative to the very aggressive. The employer may make matching contributions based on a formula or ad hoc contributions, as allowed in the agreement.
The employee has no ownership rights in any investment made by the employer to offset the deferred compensation liability. Any investment purchased by the employer is a general asset of the employer and may not be specially tied to any employee benefit. Income then received by the employee from the deferred compensation plan will be taxed as ordinary income at the time it is received.