Non Qualified Retirement Plan. Non-qualified plans are still part of your retirement package, but they don't come with all the same rules as qualified plans. And the employee sometimes has to pay.
A SEP allows employees to make contributions. Non-qualified plans are still part of your retirement package, but they don't come with all the same rules as qualified plans. Parent hereby agrees to honor or to cause its Affiliates (including the Surviving Corporation) to honor all liabilities to Company Employees and their beneficiaries arising under all nonqualified, unfunded deferred compensation programs of Company or its Subsidiaries.
However, like a Roth IRA, they can be structured for tax-free growth and tax-free access in retirement.
Non-qualified plans, on the other hand, have much less stringent requirements and consequently less favorable tax treatment.
A qualified plan must satisfy the Internal Revenue Code in both form and operation. Nondiscrimination testing is required for qualified retirement plans to ensure that benefits under the plan do not Compliance Testing measures whether a plan discriminates in favor of an HCE. Common examples include individual retirement accounts (IRAs), pension plans and Keogh plans.