PLANSPONSOR - August/September 2018 - 52
BEHAVIORAL FINANCE
Another
Way
To Save
NQDC plans help
middle and upper
management save
more for retirement
T
he IRS contribution limit for
employees who participate in
defined contribution (DC) plans-
i.e., 401(k), 403(b) and most 457 plans-or
the federal government's Thrift Savings
Plan increased this year to $18,500.
For the majority of Americans, that
seems like quite a bit to be able to save each
year for retirement-especially along with,
in some cases, the addition of employer
matching funds, profit sharing contributions
and the catch-up contributions that
workers over age 50 can make.
But, as noted by Jason Johnson, senior
vice president for wealth management
at UBS Financial Services in Orlando,
Florida, " While it is surprising for some
people to hear, it can be very challenging
to have successful participant outcomes for
highly compensated employees [HCEs] " in
a standard 401(k).
As Johnson points out, the limit on
participant contributions makes it challenging
for many holding positions from
middle management up to follow the standard
recommendation to save between
10% and 15% of salary each year. Anyone
making more than $185,000 is not
meeting that minimum recommended
salary percentage in any tax-advantaged
way in a 401(k) plan.
This means a large percentage of the
U.S. work force-the upper-tier managers
and officers of companies-has to ask
some tough questions about balancing
consumption needs, current and future
taxes, and retirement income replacement.
For many, access to a nonqualified
deferred compensation (NQDC) arrangement
can be integral to reaching the 70%
or 80% retirement income replacement
that workers are advised to pursue.
The Demographic Group
In a white paper from the Newport Group,
" Determining Eligibility in Non-Qualified
Deferred Compensation Plans, " the firm's
compliance staff discusses the complex set
of rules determining eligibility for NQDC
plans seeking to qualify for the " top-hat
exemption " -i.e., satisfying various parts
52 PLANSPONSOR.com August-September 2018 Art by Jon Han
of the Employee Retirement Income
Security Act (ERISA) so that excess benefits
can be provided without triggering
prohibited transactions or otherwise jeopardizing
the tax-qualified status of the
plan or others the employer offers. The
firm says it routinely networks with ERISA
practitioners and nonqualified plan design
consultants to keep current as to generally
accepted principles in use.
" Given the absence of a bright-line
test, the executive benefit consulting
community has historically utilized a
combination of the factors articulated by
Department of Labor [DOL] opinions and
the courts, " according to the white paper.
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PLANSPONSOR - August/September 2018
Table of Contents for the Digital Edition of PLANSPONSOR - August/September 2018
Getting Them Back on Track
2018 PLANSPONSOR National Conference
2018 Participant Survey
2018 Managed Account Buyer's Guide
Fund Change
New Interest in LDI Programs
Another Way to Save
PLANSPONSOR - August/September 2018 - C1
PLANSPONSOR - August/September 2018 - FC1
PLANSPONSOR - August/September 2018 - FC2
PLANSPONSOR - August/September 2018 - C2
PLANSPONSOR - August/September 2018 - 1
PLANSPONSOR - August/September 2018 - 2
PLANSPONSOR - August/September 2018 - 3
PLANSPONSOR - August/September 2018 - 4
PLANSPONSOR - August/September 2018 - 5
PLANSPONSOR - August/September 2018 - 6
PLANSPONSOR - August/September 2018 - 7
PLANSPONSOR - August/September 2018 - 8
PLANSPONSOR - August/September 2018 - 9
PLANSPONSOR - August/September 2018 - 10
PLANSPONSOR - August/September 2018 - 11
PLANSPONSOR - August/September 2018 - 12
PLANSPONSOR - August/September 2018 - 13
PLANSPONSOR - August/September 2018 - 14
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PLANSPONSOR - August/September 2018 - 16
PLANSPONSOR - August/September 2018 - 17
PLANSPONSOR - August/September 2018 - 18
PLANSPONSOR - August/September 2018 - 19
PLANSPONSOR - August/September 2018 - 20
PLANSPONSOR - August/September 2018 - 21
PLANSPONSOR - August/September 2018 - Getting Them Back on Track
PLANSPONSOR - August/September 2018 - 23
PLANSPONSOR - August/September 2018 - 24
PLANSPONSOR - August/September 2018 - 25
PLANSPONSOR - August/September 2018 - 26
PLANSPONSOR - August/September 2018 - 27
PLANSPONSOR - August/September 2018 - 2018 PLANSPONSOR National Conference
PLANSPONSOR - August/September 2018 - 29
PLANSPONSOR - August/September 2018 - 30
PLANSPONSOR - August/September 2018 - 31
PLANSPONSOR - August/September 2018 - 32
PLANSPONSOR - August/September 2018 - 33
PLANSPONSOR - August/September 2018 - 34
PLANSPONSOR - August/September 2018 - 35
PLANSPONSOR - August/September 2018 - 36
PLANSPONSOR - August/September 2018 - 37
PLANSPONSOR - August/September 2018 - 2018 Participant Survey
PLANSPONSOR - August/September 2018 - 39
PLANSPONSOR - August/September 2018 - 40
PLANSPONSOR - August/September 2018 - 41
PLANSPONSOR - August/September 2018 - 2018 Managed Account Buyer's Guide
PLANSPONSOR - August/September 2018 - 43
PLANSPONSOR - August/September 2018 - 44
PLANSPONSOR - August/September 2018 - 45
PLANSPONSOR - August/September 2018 - 46
PLANSPONSOR - August/September 2018 - 47
PLANSPONSOR - August/September 2018 - Fund Change
PLANSPONSOR - August/September 2018 - 49
PLANSPONSOR - August/September 2018 - New Interest in LDI Programs
PLANSPONSOR - August/September 2018 - 51
PLANSPONSOR - August/September 2018 - Another Way to Save
PLANSPONSOR - August/September 2018 - 53
PLANSPONSOR - August/September 2018 - 54
PLANSPONSOR - August/September 2018 - 55
PLANSPONSOR - August/September 2018 - 56
PLANSPONSOR - August/September 2018 - C3
PLANSPONSOR - August/September 2018 - C4
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