The Advisors' Blog

NFP’s latest Executive Benefits Trend Report focuses on nonqualified deferred compensation plans. It says NQDCPs are often a vital part of successful pay packages but may not be well understood with “significant untapped opportunities for executive benefits optimization” and “a notable gap between the benefits offered and their perceived impact.”

The data reveals a growing trend of executives becoming more discerning about their benefits: 44% of companies report that executives are increasingly demanding of the benefits they receive

This heightened interest is also reflected in NQDCP participation intentions, with some participants planning to increase their involvement: 21% aim to get ahead of future tax rates; 13% seek to combat inflation

These statistics highlight the strategic thinking of executives who view their benefits packages not just as compensation but as tools for long-term financial planning and wealth preservation.

Despite the demand among executives, two-thirds of executives feel like they don’t fully understand their benefits. The alert recommends improving participant understanding to ensure executives make full use of the benefits offered to them, especially given the increasing demands for NQDCPs. Improving your internal communications about NQDCPs doesn’t just help the executives; it “also maximizes the return on investment in these valuable retention and motivation tools.”

Check out the report for tips on:

– Tailoring NQDCPs to company objectives
– The importance of plan communication and knowledge-sharing
– Evolving retirement behaviors of executives
– Balancing executive benefits with financial concerns in an uncertain economic climate
– Leveraging executive retention as a hedge against uncertainty

– Meredith Ervine