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According to a new report from WTW, many employers are making changes to nonqualified retirement plan offerings, in an effort to attract and retain top employees such as executives and other high-income earners. The analysis found that there is a renewed focus on nonqualified retirement plans, which are plans that are not subject to Employee Retirement Income Security Act (ERISA) rules and can include deferred-compensation plans, executive bonus plans, and split-dollar life insurance plans. The nonqualified plans do not generally use pre-tax dollars, in contrast to plans such as 401(k)s.

“Employer interest in nonqualified retirement plans is at an all-time high. In fact, we have helped clients implement more new plans and redesign existing plans in the past two years than in prior years,” said Chris West, senior director, head of Dallas Retirement, and leader of WTW’s Nonqualified Plans Specialty Group. “While employers have been investing time and effort into their nonqualified plans, many recognize they aren’t getting or providing the value intended. As a result, employers are looking to improve the employee experience through more focused communication and education as part of their redesign strategy.”


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