So here is a simple idea – The Five Year Bridge Non-Qualified Retirement Plan

Let’s put you in the shoes of the Business Owner for a few minutes. You want to execute a program to attract and retain key employees but don’t want to get over complicated. Here is a simple Non-Qualified Benefit design that is easy to manage and explain.

Here is a sample benefit letter to a Key Employee.

Dear Key Employee –

ABC Company is creating a Non-Qualified Benefit Plan to reward you for excellent performance and contribution to the company. Here is a brief description of the plan.

1 – Each year ABC will contribute money into NQ Account for you and interest will also be credited over time. This is in addition to normal 401(k) and profit sharing dollars.

2 – The amount of the contribution will be 20% of your incentive bonus.

3 – You may choose to put additional money into the account before tax.

4 – At age 65 the account will be paid out to you over five years.

5 – The payments will allow you to take less out of your 401(k) and other retirement savings that do not need to be distributed until you reach the age of 70-1/2.

6 – If you leave the company before you are fully vested you will only be paid the vested amount.

7 – If you die or become disabled before you are fully vested the company will automatically vest you 100% and payments will be made to your or your beneficiaries.

Thank you for your dedication to the success of ABC.

SUMMARY – It really does not have to be complicated to get the job done.

Thank you for reading,

Doug Marshall


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