What is a Deferred Compensation Plan (nonqualified)?

A nonqualified deferred compensation (NQDC) plan is an agreement between an employee and their employer to pay some portion of the employee’s compensation in the future. It may be dependent on the employee completing certain requirements — such as years of service or honoring the terms of a non-competition agreement — or it may simply be an agreement to pay some of their current salary at a future time.

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