Before you make any decisions about whether to participate in your company’s nonqualified deferred compensation plan, you must know at least the basic concepts and consequences of participation, as I explain in this four-part article series. Part 1 discusses the various designs of NQDC plans and the inherent risks of participating.

Companies give them different names, and there are differences between NQDC plans. They can be called any of the following…

There is no universally accepted practice for naming or designing excess 401(k) plans (i.e. deferrals for amounts over 401(k) maximums) or elective deferred compensation plans. The name depends entirely on…