Nonqualified plan

Nonqualified plan

A retirement plan that does not meet the IRS requirements for favorable tax treatment.

Nonqualified Plan

An annuity or pension plan that one buys individually rather than through an employer. Nonqualified plans are not subject to the same restrictions as qualified plans. As a result, withdrawal penalties are smaller or non-existent, and one may continue to make contributions to a more advanced age (sometime until the annuitant is over 80). In the United States, specific restrictions on nonqualified plans are set at the state level. The IRS does not regulate them; as a result, contributions are not tax-deductible, but earnings still are.
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With approximately $2.5 million in annual revenue, ACI provides design, consultation and administration of 401(k) plans, profit-sharing plans, nonqualified plan administration and traditional defined benefit plans to more than 400 clients.
Further, for many employers, an important benefit of a life insurance funded nonqualified plan is that it avoids the qualification requirements that can apply to other types of plans--the employer is free to offer participation selectively, without worrying about the nondiscrimination requirements that apply to other plans.
The audit includes nonqualified plan administration, human resources, information technology, corporate finance budgets and general corporate operations.
Penalty exceptions available for distributions from a funded nonqualified plan differ depending on whether the plan was formerly a qualified plan, TSA, or eligible state or local plan.
(3) Cancellation of an existing plan can avoid being characterized as a substitution of benefits if the plan is terminated by the employer, the termination "does not occur proximate to a downturn in the financial health" of the employer, the employer terminates all nonqualified plans of the same type and the employer does not adopt a similar nonqualified plan within three years of the plan termination.
The Internal Revenue Service has proposed rules that taxpayers could use to calculate what they owe when nonqualified deferred compensation plans violate nonqualified plan requirements.
Nonqualified plan distributions are taxable to the distributee, but section 402(b)(2) does not define distributee to include spouses and former spouses.
You have the option of deferring $25,000 under a nonqualified plan (see sidebar, "Qualified Versus Nonqualified Plans") or having the money paid out and taxed currently.
M2 EQUITYBITES-May 15, 2018-Voya Financial to Acquire Pen-Cal to Integrate Nonqualified Plan Services
* A nonqualified plan. Some employers decide to take the additional step of offering a nonqualified deferred compensation (NQDC) plan, which allows an employer to define the eligible participants as it wishes.
The nonqualified plan and defined benefit plan have separate communications."
Erek frequently analyzes, drafts and amends both qualified and nonqualified plan documents, and has substantial experience counseling a diverse roster of clients in connection with plan implementation, compliance and termination-related matters arising under ERISA, the Internal Revenue Code and other applicable laws.