Voluntary Deferral Plan
Vehicle for the deferring of unneeded current income for a later date, such as retirement, providing the following benefits: There is no tax on earnings of the plan until distributed; Employee is able to defer compensation in excess of the amount subject to the limitations of qualified plans since the voluntary plan is a non qualified plan; The amount the employee defers can be matched by the employer; The employer and employee have flexibility in designing BENEFITS and VESTING requirements; The employer can select employees to participate in the plan since it is a non qualified plan and does not have to comply with the antidiscrimination provisions of qualified plans found under the EMPLOYMENT RETIREMENT INCOME SECURITY ACT (ERISA); Life insurance can be used as the funding instrument and, as such,the employer can receive the death benefit, thereby recovering its matching contribution to the plan.
Popular Insurance Terms
Model act written and published by the national association of insurance commissioners (naic) whose purpose it is to regulate brokers who control insurance companies. The act permits the ...
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