Business & Employers

Deferred Compensation & Defined Benefit Plans

Qualified 401(k) plans have contribution caps that often fall short for owners and key executives. Non-qualified deferred compensation, SERPs, and cash balance plans solve that — letting select employees defer significant compensation and letting owners deduct large contributions today. We help establish and monitor these advanced plans alongside ERISA counsel and your CPA.

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Who We Help

  • Owners and partners who max out their 401(k) and still want to defer six figures of income
  • C-suite executives whose qualified plan contributions are heavily restricted by IRS limits
  • Privately held businesses that want to retain a small group of key employees with golden-handcuff plans
  • Professional service firms (medical, legal, dental) that need defined benefit plans for high-income partners

Plan Types We Help Establish

  • Section 409A non-qualified deferred compensation plans for key employees
  • Supplemental Executive Retirement Plans (SERPs) and salary continuation plans
  • Cash balance plans paired with 401(k) profit sharing for combined six-figure deductible contributions
  • Top-hat and rabbi trust arrangements with appropriate informal funding strategies
  • Executive bonus (Section 162) plans using permanent life insurance

Funding & Risk Considerations

  • Corporate-owned life insurance (COLI) and mutual fund informal funding strategies
  • Rabbi trust structures that protect employees from change-of-control while preserving tax deferral
  • Annual plan reviews to support ongoing 409A compliance and help avoid 20% penalty taxes
  • Coordination with ERISA counsel on documentation and elections

Frequently Asked Questions

What is 409A and why does it matter?

Section 409A of the tax code governs non-qualified deferred compensation. Violating its strict rules around deferral elections and distributions can trigger immediate income recognition plus a 20% federal penalty tax for the employee.

How is a cash balance plan different from a 401(k)?

A cash balance plan is an IRS-qualified defined benefit plan that allows much larger annual deductible contributions — often $100,000 to $300,000+ per partner depending on age — making it powerful for high-income owners.

Are deferred comp plans only for huge companies?

No. We help establish NQDC and cash balance plans for businesses as small as 5 to 25 employees, especially professional service firms with high-income owners.

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Every plan begins with a complimentary, no-obligation conversation about your goals.

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This information is not intended as authoritative guidance or tax or legal advice. You should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.