If there is a wide pay gap between your upper management personnel and your rank and file employees, you may consider offering both a qualified retirement plan, such as a 401(k) o SIMPLE IRA, and a nonqualified plan. This way you can provide more tax-deferral and long-term savings flexibility to your highly compensated employees without being restricted by IRS limits.
Here are the main differences between qualified and nonqualified plans:
|
Plan Feature
|
Qualified Plan
|
Nonqualified Plan
|
|---|---|---|
|
Elegibilidad |
Must be available equally to all employees as defined by the plan
|
Can be made available only to select employees
|
|
Compensation deferral limits
|
Yes; total dollar limits are adjusted each year by the IRS; pre-tax maximum for 2014 is $17,500
|
No IRS-defined limits
|
|
Distribution timing
|
Generally, cannot take distributions before age 59½ except for certain financial hardships
|
Several options available but once a distribution option is elected, it cannot be changed; Section 409A restrictions apply
|
|
Mandatory distributions
|
Yes; must take Required Minimum Distributions starting at age 70½
|
Not required by IRS but plan rules may apply
|
|
Assets protected from company creditors
|
Sí |
No
|
|
Préstamos |
Yes, if the plan allows
|
No
|
|
Participant and company tax deduction on deferrals
|
Yes, in the year of deferral
|
Yes, but not until distribution
|
|
Rollover to IRA upon job loss
|
Yes, under terms of the plan
|
No
|
