Executive Benefits Survey Results of the 2011 ... - Hay Group

7 Executive Benefits Survey
Separation from service, death and disability top the list of criteria for payment of benefits,
while lump sum payments and annual instalments are the most prevalent payment type.
What are the criteria for payment of benefits under the
What are the payment options under the NQDC
NQDC plan?
plan?
Separation of Service 90% Lump Sum 94%
Death 84% Fixed Annual Installments 62%
Disability 70% Single or J&S Annuity 10%
Change of Control 48% Monthly Installments 10%
Specified Period of Time 45% Other 7%
Hardship 43%
Other 9%
The most prevalent basis for crediting interest to participant accounts was found in the
“other” category, as more than half the respondents in this category indicated that
participants earn a rate of return based on their selected investments. Nearly all of the
remaining respondents in this category mirror the return of the 401(k) plan funds, as elected
by the participant.
What is the basis for interest crediting on NQDC deferrals?
Participant Directed Investments 30%
Stock Index 20%
Mirror 401(k) Plan Investments 17%
Bond Index 16%
Fixed Rate 13%
Treasury Note 11%
Prime Rate 11%
Company Stock 11%
Other 8%
With regard to funding, 54% of organizations have some type of funding arrangement in
place for their NQDC program.
Is the NQDC plan funded?
Informally funded 54%
Unfunded 44%
Considering 2%
What vehicles are used to fund the NQDC?
Rabbi trust 69%
Life insurance 30%
Other 13%
Paid out in cash each year without gross-up for taxes 8%
Secular trust 2%
Not-for-profit stock option plan 0%
Severance plan 0%
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