Voluntary Deferral Plan

Definition of "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.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Corporate or government security that pays interest and obligates the corporation or government agency to pay that interest at the end of specific time intervals, and to pay the principal ...

Insurance company established by a trade group or other association to provide selected types of primary insurance and/or liability insurance for members of the association and access to ...

Liability arising out of the operation of a motel or hotel as it pertains to the physical safety of guests and their property. ...

Act designed to help reduce the federal deficit by approximately $496 billion over five years through a restructuring of the tax code. The following include some of the major provisions ...

One who submits a claim for an incurred loss. ...

Time frame during which an annuitant makes premium payments to an insurance company. The obligations of the company to the annuitant during this period depend on whether a pure annuity or ...

Amendment that modifies the federal flood insurance program by providing relocation and acquisition coverage for structures in imminent danger from an encroaching shoreline. This amendment ...

Insurance company's liability for incurred but unpaid expenses. ...

Payments from an employee's employee benefit insurance plan that can be rolled over to an individual retirement account (IRA) or to another plan maintained by the employer that accepts ...

Popular Insurance Questions