Non-Qualified Deferred Compensation Plan

A Non-Qualified Deferred Compensation (NQDC) Plan is an agreement where an employee chooses to delay part of their salary or bonuses to be received later, often to reduce current taxes or save for future needs. Unlike qualified plans, these arrangements aren’t protected by strict government rules, so they can be tailored to individual agreements but carry higher risks if the employer faces financial trouble. Essentially, it allows employees to defer income to a future date, typically retirement, providing flexibility in managing their pay and tax obligations.