Now that tax rates have increased for high earners, have nonqualified deferred compensation (NQDC) arrangements once more become a valuable tool? This article looks at whether these changes have made nonqualified deferred compensation plans more attractive. It also examines how certain features of NQDC plan design can cause you tax problems.

Every fall, usually in October, the IRS announces limits under Section 415 of the Internal Revenue Code that will apply in the following year to contributions and benefits made under qualified retirement plans. These numbers are adjusted annually for changes in the cost-of-living index…