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myNQDC.com Alert: New Expert Insights, October 26, 2011

Late October marks one year since the launch of myNQDC.com, the most comprehensive online resource on nonqualified deferred compensation plans. Thank you for your membership. We are honored by the glowing testimonials we have received about the value of our website and the guidance it has provided for both participants and professionals.

We continue to enrich our content with crucial updates and practical new articles and FAQs about key NQDC topics. Below are selected additions and updates from the past few months.

Alert: Revised Limits For Qualified Plans Also Affect NQDC Plans

Last week, the IRS announced increases in the amounts that can be contributed during a calendar year to qualified retirement plans, such as 401(k) plans. These changes are the first in a few years. Among the increases taking effect in 2012, the annual maximum you can put into all qualified plans will rise from the current $49,000 to $50,000, and the ceiling on annual amounts of compensation that can be considered in the deferral calculation will go up from $245,000 to $250,000. The articles and FAQs on myNQDC.com have been updated for all of the revised limits, which will become effective in 2012.

Anyone who wants to contribute or receive more than what is allowed by the revised IRS rules during a single year will need to use a nonqualified deferred compensation plan. One of the major advantages of NQDC is that you can contribute much higher amounts toward retirement than you can under qualified plans.

Exclusive Articles & FAQs: Selected New Content

With clear writing and independent, unbiased expertise, myNQDC.com will make you smarter about not only the basics of nonqualified deferred comp but also the related financial planning, taxation, risk, and legal issues. Our exclusive articles and FAQs can be found nowhere else. Below are a few of our recent additions.

Nonqualified Plan Financing Strategies. How your company finances its NQDC plan is an important decision with long-lasting consequences. In this article, executive benefit consultants Richard DeVita and Scott Holton (The Todd Organization) evaluate the reasons and available alternatives for financing NQDC plans. They also analyze funding techniques and the related factors to consider.

Keys To Successful NQDC Plans At Small Companies: A View From The Trenches. Nonqualified deferred compensation is not just for big corporations. Small companies can use NQDC plans to offer the same advantages of tax deferral and savings for any highly compensated executive or key employee. In this article, executive benefit consultants Cline Young and Mark Levitats (Gallagher Retirement Services) discuss the special issues a privately held company faces with an elective deferral NQDC plan. Drawing on their experience, they examine real-life challenges facing small employers.

Rabbi Trusts: Benefits, Features, And Key Considerations. While the use of a rabbi trust can furnish some security for NQDC participants against company insolvency or a corporate change of heart, it presents special concerns about design, administration, and the selection of a trustee/provider. In this article, NQDC expert Michael Hlavin (Wilmington Trust) looks at the rules and the practical considerations.

My company plans to spin off my division. What can happen to my NQDC plan and my elections for deferrals and distributions? Many of the contingencies for a nonqualified deferred compensation plan depend on the details of the spinoff and on the plan documents. For this new FAQ, we asked the compensation and benefits experts on the myNQDC.com Advisory Board for their input on this situation.

How do I name a beneficiary who would receive my NQDC account balance if I were to die before getting it? While the ability to name beneficiaries, and your company’s rules for doing so, may be the same as in other benefit plans, differences in some areas (including tax treatment) probably exist. This FAQ explains.

What is a QSERP? A QSERP is one of the names given to the strategy of shifting accrued or future benefits from a SERP to a qualified retirement plan. This twist on the supplemental executive retirement plan (SERP) is explained by this new FAQ, which includes expert technical input from myNQDC.com Advisory Board member Michael Melbinger, an attorney at Winston & Strawn who specializes in executive compensation and benefits.

See myNQDC.com for these additions and other updates.

Licensing And Premium Memberships

Thank you again for your membership at myNQDC.com. To read more about the site, including testimonials, and to learn about our corporate services, see the About Us and Licensing sections of myNQDC.com. Please contact us (617-734-1979, info@mystockoptions.com) to obtain more information about licensing content for your website, print materials, and/or newsletters, and for premium memberships at special bulk rates for your staff.