Deferred compensation plans are an excellent way for employers to attract and retain skilled employees. Deferred compensation plans are a benefit to employees because they can defer a portion of their salary to a later date to avoid the associated tax penalties. There are two different types of deferred compensation plans: qualified plans and non-qualified plans. In a non-qualified plan, tax deductions are deferred and employer contributions are unlimited. Non-qualified plans are generally less expensive. Conversely, qualified plans are often eligible for rollover to an IRA or other qualified plan. Highly paid employees may be prohibited from participating in a qualified plan.
Pensions and retirement benefits are examples of deferred compensation plans. Other examples include: 401k plans, 457 plans, and 409a plans. Each one of these plans has definite incentives and drawbacks for both employees and employers. The professionals at Savage & Associates can help you to understand what deferred compensation plan would work best for you and your employees.
Call 419-475-8665 or fill out our on-line request form for more information or to schedule an exploratory appointment with our experienced professionals at Savage & Associates.