What is NON-QUALIFIED DEFERRED COMPENSATION (NQDC)?

A retirement contribution that the employee has earned, but which is yet to be paid by the employer. It is not taxable as it has yet to be received. Employees with high salaries are beneficiaries of this compensation due to the limit imposed on standard pension and tax qualified profit sharing plans. As such compensations do have the same tax benefits as a qualified retirement plan, they are referred to as ‘non-qualified’.

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