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NQDC plans

901 Views | 4 Replies | Last: 4 yr ago by aglaw01
Long Live Sully
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AG
Anyone here have experience setting up a NQ deferred comp plan?
Casey TableTennis
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AG
Not answering your question, but curious if the 415(c)(1)(A) limit will be hit with the planned deferred comp contributions. If not, adding after-tax contributions as an option to the 401(k) plan may be a better path.
Long Live Sully
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AG
As I read about them on Fidelity's site there is no limit on the amount or percentage of compensation. Taxable on withdrawal per the plan schedule.

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Casey TableTennis
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AG
If you are contributing less than $56k (a little higher if over 50) across all DC and DB plans, a NQDC likely isn't needed. If more than $56k total contributions is desired, the NQDC likely still makes sense.

I only brought it up as most plans don't allow after-tax contributions and it would be a much cheaper/easier solution if you weren't trying to defer a lot more.

Be aware that after-tax contributions are subject to top-heavy testing, while the NQDC contributions are not.
Long Live Sully
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AG
Yep.. That is why I am looking to set one up.
aglaw01
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AG
Beware Code section 409A - applicable to NQDCs and very draconian.
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