The recession has reduced the penetration rate for non-qualified deferred compensation plans, but the plans continue to be popular, a consulting firm says.

Clark Consulting, Inc., Dallas, has included statistics on the NQDC market in a summary of results from its latest biennial executive benefits survey. About 110 Fortune 1000 employers participated in the mail-in survey.

In 2007, 95% of the employers that participated in the previous Clark executive benefits survey had NQDC plans. Prevalence has fallen to 85% this year but remains high, Clark says.

Roughly two-thirds of the participants said they have supplemental executive retirement plans, and the percentage with SERPs is about the same as in 2007, Clark says.

Use of informal funding mechanisms increased to 71%, from 62%, for NQDC plans but fell to 39%, from 48%, for SERPs.

For both plan types, corporate-owned life insurance and trust-owned life insurance arrangements remain the most commonly used funding vehicles. About 61% of the NQDC sponsors and 68% of the SERP sponsors said they fund their plans with COLI or TOLI.

The percentage of respondents exclusively administering their NQDC plans in-house dropped to 3% in 2009, down from 15% in 2007 and 19% in 2005. But 32% of the respondents still manage SERPs in-house. That’s up from 30% in 2007 but down from 44% in 2005.

The decrease in in-house administration of SERPs since 2005 “may reflect a need for more sophisticated administration and greater capabilities in light of the need to satisfy the requirements of Internal Revenue Code section 409A,” Clark says.