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.
References in periodicals archive ?
The audit includes nonqualified plan administration, human resources, information technology, corporate finance budgets and general corporate operations.
transfer benefits from a nonqualified plan into a qualified plan.
The 2009 supplement includes information on the division of benefits by the IRS, DOL, Pension Benefit Guaranty Corporation, and other government agencies; the transfer of retirement assets from the dissolution of same-sex marriages, domestic partnerships, and civil unions; post death issues and survivor rights; more coverage of church-sponsored plans and Indian tribal plans; reexamination of old rules through recent court rulings; controversial aspects of the allocations between participants and alternate payees; the latest court decisions on the division of qualified and nonqualified plan benefits; administration procedures and errors; recent developments in spousal and child support, and maintenance obligations; and recent legislation.
Put your nonqualified plan into an irrevocable trust even though this causes immediate taxation.
After some minor edits, they distribute their RFP to qualified plan and nonqualified plan providers alike, often with only a one-week turnaround deadline.
Many companies will design a nonqualified plan utilizing the security provisions of a Rabbi Trust.
Moreover, before deciding to participate in a nonqualified plan, assess the future financial health of your employer.
Now the IRS has ruled privately that elective deferrals initially assigned to a nonqualified plan but later transferred to a qualified 40 1(k) plan maintained by the same employer may be excluded from gross income.
A nonqualified plan is for highly compensated employees.
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.
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.