Nonqualified plans play a key role in attracting and retaining talent
| Ranked 1 | Ranked 2 | Ranked 3 | |
|---|---|---|---|
| Attraction/Retention of key talent | 37% | 25% | 22% |
| Have a competitive benefit package | 20% | 41% | 23% |
| Provide avenue for eligible employees to accumulate wealth (in addition to qualified plan[s]) | 27% | 19% | 28% |
Sponsors eye changes to NQ plans with focus on improving participant experience
55% of sponsors have changed or plan to make changes to their NQDB plan
Key changes
Improve participant experience (e.g., communication, education)
- 15% completed in the last 2 years
- 11% planning for 2023
- 15% considering for 2024
Change administration providers
- 20% completed in the last 2 years
- 4% considering for 2024
Close plan to new entrants
- 12% completed in the last 2 years
Freeze accruals
- 8% completed in the last 2 years
- 5% considering for 2024
75% of sponsors have changed or plan to make changes to their NQDC plan
Key changes
Improve participant experience (e.g., communication, education)
- 27% completed in the past two years
- 20% planning for 2023
- 26% considering for 2024
Change investment menu
- 20% completed in the past two years
- 8% planning for 2023
- 12% considering for 2024
Change eligibility
- 16% completed in the past two years
- 9% considering for 2024
Change administration providers
- 11% completed in the past two years
- 15% considering for 2024
NQ plan sponsors look to enhance employee experience
Sponsors plan to improve communication and education to maximize the value and employees’ understanding of their plans, particularly NQDC plans.
| Communication | Education | Financial consulting | |
|---|---|---|---|
| NQDB plan sponsors | 29% | 29% | 16% |
| NQDC plan sponsors | 52% | 47% | 28% |
Funding of NQ plans is more prevalent, and the vehicle to do so has changed
60% of NQDC and 47% of NQDB plan sponsors informally fund their plan
| NQDB | NQDC | |
|---|---|---|
| Source of cash for participants’ distribution | 69% | 63% |
| Perceived benefit for participants | 54% | 58% |
| Mitigate market volatility | 48% | 52% |
| NQDB | NQDC | |
|---|---|---|
| Mutual funds | 43% | 60% |
| COLI | 33% | 27% |
Actions to take now!
- Assess the role your NQ retirement plan(s) can play to help attract and retain key talent.
- Consider how your organization can enhance its employee experience to help maximize the value of the NQ plan(s).
- Understand whether your NQ plan is competitive and what design features are best practice.
- Review your NQ plan financing strategy in light of current market conditions.
- Keep on top of ongoing NQ plan compliance needs.
Download
| Title | File Type | File Size |
|---|---|---|
| Nonqualified retirement sponsors focus on employee experience and mitigating risk | .1 MB |
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