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July 29, 2014 at 12:00 PM
Relative to 2012, more executives participating last year in non-qualified deferred compensation plans say they intend to increase their deferrals in such plans. Among the reasons for the planned increases: an ability to defer more and expected increases in income tax rates.
So reports Principal Financial Group in a new survey, “2013 Trends in Nonqualified Deferred Compensation.” The mid-year 2014 report polled 266 non-qualified deferred compensation (NQDC) plan participants who have a plan balance of at least $10,000, are 35-plus years old, have an individual income of $115,000 or more, hold an executive job title and are not working for a government agency, school district, community hospital or public university.
The research indicates that more than half of survey respondents (55 percent) expect to maintain current contribution levels, while 37 percent plan to increase deferrals. The reasons for those planning to increase deferrals include the following:
| Reasons for increasing deferrals |
2013 |
2012 |
| Can afford to defer more |
86% |
77% |
| Expect increase in tax rates |
66% |
64% |
| Can’t save enough in qualified plan |
63% |
49% |
| Belief in the success of their employers |
63% |
61% |
The Principal report indicates that more than three-quarters of NQDC plan participants (77 percent) are likely to recommend their plan to another eligible employee. And more than 9 in 10 participants say the plans are important in reaching retirement goals.
