Nonqualified Deferred Compensation PLAN SIZE: Business owners looking to attract and retain executive-level employees; reward highly compensated employees who cannot contribute the maximum benefit under the owner’s qualified plan; forfeited retirement benefits at a former employer when changing employment; agree to defer compensation to a future date for current services. ELIGIBILITY: Employer determines eligibility requirements; however, plan may only benefit a select group of highly compensated employees (generally 5% of employees). Cannot include rank-and-file employees. FUNDING: Generally, employer-funded but employee contributions are permitted for some types of plans. VESTING: Assets are generally taxed when paid out. Return to Investment page