Voluntary Deferral Plan


Definition of "Voluntary deferral plan"

Bob Dimartino
Bob Dimartino ERA Belcito & Associates

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.

Have a question or comment? We're here to help.

 
 
 
*** Your email address will remain confidential.
 
 

Search Real Estate Terms

Popular Real Estate Terms

Popular Real Estate FAQ