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The plan is a voluntary savings program that allows employees to defer any amount, subject to annual limits, from their paycheck on a pretax basis.
The State of Nebraska Deferred Compensation Plan (DCP) is designed to provide employees a supplementary retirement income. As with other retirement plans, there are restrictions on withdrawals from a DCP.
There are four major types of nonqualified plans: Deferred-compensation plans. Executive bonus plans. Split-dollar life insurance plans. Group carve-out plans.
Other examples of qualified plans include: Profit-sharing plans. 403(b) plans. 457 plans. Money purchase plans. Employee stock ownership plans (ESOPs) Salary Reduction Simplified Employee Pension (SARSEP) plans. Simplified Employee Pension (SEP) plans. Savings Incentive Match Plan for Employees (SIMPLE) plans.
Qualified plans include 401(k) plans, 403(b) plans, profit-sharing plans, and Keogh (HR-10) plans. Nonqualified plans include deferred-compensation plans, executive bonus plans, and split-dollar life insurance plans.
Deferred compensation plans are an incentive that employers use to hold onto key employees. Deferred compensation can be structured as either qualified or non-qualified under federal regulations. Some deferred compensation is made available only to top executives.
Deferred compensation plans generally come in two different forms: qualified and non-qualified. Although there are similarities, there are also distinct differences between these two types of deferred compensation plans.
The 457 Plan is a type of tax-advantaged retirement plan with deferred compensation. The plan is non-qualified ? it doesn't meet the guidelines of the Employee Retirement Income Security Act (ERISA). 457 plans are offered by state and local government employers, as well as certain non-profit employers.