nonqualified plans

Nonqualified plans are employer-sponsored retirement or benefit programs that do not meet specific government rules required for tax advantages, like qualified plans (e.g., 401(k)s). They are typically offered to highly compensated employees and allow more flexible terms. While contributions to nonqualified plans are often taxed when made, they can provide additional retirement savings beyond limits of qualified plans and offer benefits like deferred taxes or supplemental income. However, they lack certain protections and tax advantages of qualified plans, making them a tailored but riskier benefit option for select employees.