NQDC Plan Participation Continues to Grow
NQDC Plan Participation Continues to Grow

Plan Sponsor Council of America (PSCA) has released the results of its recent study on nonqualified deferred compensation (NQDC) plan participation. The findings show that roughly 66 percent of nonqualified deferred plan eligible employees participated in employer NQDC plans in 2020, in contrast to the 53.4 percent of employees who participated in their organization’s NQDC plan per the PSCA’s 2018 study.
The study further shows that the NQDC plan participation documented by the 2020 study, accounted for deferral of, on average, 10.5 percent of the employee’s base pay. The study by PSCA, an umbrella group of the American Retirement Association (ARA), surveyed more than 100 nonqualified deferred compensation plans offered in 2020. The majority of employers that offer NQDC plans stated that enhancing recruiting and retention of talent is one of the primary reasons they offer the plans.
PSCA Nonqualified Plan Study | Previous | Current |
Eligibility | 5.2% Total employees eligible (2018) | 6.1% Total employees eligible |
Participation | ≈ 50% Eligible employees participating (2019) | 66% Eligible employees participating |
Employer Contribution Formula | 30% of plans offer restoration match designed to fill the gap created by 401(k) plan limits | 30% of plans offer restoration match designed to fill the gap created by 401(k) plan limits |
Education | 55.6% Provide plan-specific education (2018) | >70% Provide plan-specific education |
Education Supports NQDC Plan Participation
The survey also revealed positive growth in the number of plan sponsors who recognize the importance of employee education regarding NQDC plans. The PSCA 2018 survey showed 55.6 percent of organizations providing education specific to NQDC plans. That number, per the 2020 survey, is now up to over 70 percent.
“Providing employees with investment advice related to NQDC plans has almost doubled, based on the Plans Sponsor Council of America’s findings,” said Bruce Brownell, Senior Vice President Retirement, at OneDigital. “As organizations strive to partner better with employees, positioning them for effective retirement planning, education is critical.”
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