Plan Administration Guide, Part Two: Recordkeeping Survey

Breaking down the DC industry by plan type.

Industry Snapshots

Industry Snapshots

Nonqualified DC Plan Snapshot

Prior to 2008, plan sponsors could find just two types of providers in the nonqualified deferred compensation (NQDC) market: specialists, who offer deep NQDC-specific expertise, and generalists, who offer NQDC administration as a convenient add-on to their qualified plan business. Since then, the market has become more blended, with the emergence of “hybrid” organizations capable of delivering on both value propositions. Today, the market is almost evenly split, with hybrid organizations totaling more assets/participants, and specialists retaining more plans, which may explain why only 10% of the overall market bundles NQDC plans with other services.

Generally speaking, NQDC plans are small—75% have fewer than 25 participants and 65% have less than $5 million in assets/liabilities—and are funded via a rabbi trust (70%). Mutual funds are the most common source of funding (75%), with corporate-owned life insurance (COLI) and business-owned life insurance (BOLI) together running a distant second (15%). Approximately 20% of NQDC plans are unfunded. Although they are small, NQDCs can be an important but complex benefit for high-income employees/executives, so finding a provider capable of delivering the right combination of knowledge, administration, funding strategies and participant education is no less important than decisions related to larger, more common plan types. —BOK

Total NQDC Plan Assets ($mm)


Total Assets, Plans, and Participants

Total 401(k) Assets, Plans, and Participants
By Plan Size Assets ($mm)* Plans* Participants*
<$10mm $431 2,397 57,421
$10mm – $50mm $2,701 2,130 35,907
>$50mm – $200mm $8,965 1,693 65,494
>$200mm – $1b $27,632 1,245 121,500
>$1b $92,970 526 344,103
*Data includes only Section 409A plans; other plans sometimes grouped in this category—i.e., nongovernmental 457(b) and 457(f) plans—are reported in 457 plan/asset/participant totals. Not all providers report complete data, therefore data segmented by plan size will not equal the corresponding overall total.