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Newport, an Ascensus Company, and PLANSPONSOR Trends Survey Shows Broader Adoption of Nonqualified Deferred Compensation Plans

Thursday, September 26, 2024

DRESHER, Pa., Newport, an Ascensus company, and PLANSPONSOR released the results of the 2024 Newport/PLANSPONSOR NQDC (Nonqualified Deferred Compensation) Trends Survey. This year's survey revealed that employers are increasingly looking to use NQDC plans in their effort to attract and retain key employee talent and are expanding offering these plans to deeper levels of their organizations. The full report can be downloaded here.

The report, released biannually since 2020, is the retirement industry's broadest and most comprehensive employer perspective on NQDC plans, providing insights and trends from among hundreds of the nation's leading firms.

"We're pleased to continue our partnership on this survey with PLANSPONSOR and share this important information with the NQDC industry," said Mike Shannon, Senior Vice President, NQ Strategic Development. "This year's survey results confirmed the trend we've been seeing—more small and mid-sized companies are implementing NQDC plans. The final report is a useful tool for employers and plan committees as the need to attract and retain key employees in today's job market continues to intensify."

Key Findings

● An increasing need to attract and retain top-tier senior leadership is prompting small and mid-sized businesses to integrate NQDC plans into their benefits packages.

● Offering financial wellness (budgeting, debt management, investment and retirement planning) is becoming a growing trend as an added benefit to NQDC plan participants.

● A plan sponsor's primary goal is a continued focus on communicating to and educating plan participants.

● Businesses are increasingly employing a mix of corporate-owned life insurance (COLI) and mutual funds. This shift has emerged as plan sponsors recognize that leading recordkeepers with expertise in the NQDC market are capable of administering various types of trust funding.

● A number of plan sponsors are considering switching NQDC plan administrators to enhance service, cut costs, or access better features.

Developed jointly by PLANSPONSOR and Newport, an Ascensus company, the survey was sent to a cross-section of organizations, ranging in size, and including PLANSPONSOR subscribers, Fortune 1000 companies, and various other for-profit and tax-exempt companies. The data collected includes responses from more than 265 unique companies across 46 different industries. The survey aims to capture the current state of NQDC plans and today's issues facing advisors, plan sponsors, and their participants. The full survey report can be downloaded here.

"Nonqualified deferred compensation plans are an important recruitment and retention tool for top executives at employers of all types and sizes," says Alison Cooke Mintzer, Publisher, PLANSPONSOR, Managing Director, ISS STOXX. "The Newport/PLANSPONSOR survey shows employers continue to adjust strategies to improve the financial benefits of NQDC plans for employees while streamlining administration and securing funding."

The data provided by the report can be leveraged by both employers and executive leadership within organizations when considering the benefits and priority level of certain plan design features based on employee needs. Financial advisors also use the report in benchmarking plan success with clients, referencing the data in conversations around current market trends. The in-depth analysis provided in the report allows audiences to quickly pull key insights from the data, allowing them to take advantage of the expertise of Newport's nonqualified plan consultants.