A Non-Qualified plan is a retirement plan that does not meet IRS (or ERISA) requirements for favorable tax treatment. Non-qualified retirement plans are funded by employers and are more flexible than, but do not have the tax benefits of, qualified retirement plans. They are primarily offered to executives and other highly compensated employees whose participation and benefits from qualified plans may be significantly restricted. The plans may differ significantly from company to company, and from individual to individual within the same company. Unlike with qualified plans, there are no legal contribution limits for Non-Qualified plans. Typically, they are funded in one of three different ways: "Pay-as-you-go," mutual funds (and other publicly traded investments), and life insurance. The life insurance option is a popular and typically cost-effective funding mechanism. Benefits are paid at retirement age in the form of annuity which is taxed as ordinary income, or in lump sum payments which can be transferred into an IRA to defer taxes which is opposite of a qualified retirement plan.

Non-Qualified plans do not permit you to roll over plan assets into an IRA or another Non-Qualified plan when changing jobs. Let us help you determine whether or not this plan is the right program to fit your needs.