Non Qualified Plan Law and Legal Definition
Nonqualified plans, in the context of employee benefits, are employer plans that do not meet IRS qualification requirements. They are benefit plans that either do not meet the IRS Code or the ERISA requirements. The plans are funded by employers and are more flexible, but they do not have the tax benefits of qualified plans. Benefits are paid at the retirement age in the form of annuities, which are taxed as ordinary income tax, or in lump sum payments, which can be transferred into an IRA to defer taxes.
Non-qualifed plans may include, among others:
- Directors’ Benefit Plans
- Incentive Plans
- Benefit Financing Strategies
- Capital Accumulation Plans
- Benefit Securitization Strategies
- Salary Continuation Plans
- Acquisition Enhancement Strategies
- Life Insurance Plans
- Owner Succession Plans
Legal Definition list
Related Legal Terms
- 401 K Plans
- 504 Plan [Education]
- Ab Abusu Ad Usum Non Valet Consequentia
- Ab Assuestis Non Fit Injuria
- Absoluta Sententia Expositore Non Indiget
- Accessorium Non Ducit Sed Sequitur Suum Principale
- Accountable Reimbursement Plan
- Accumulation plan [Internal Revenue]
- Acquisition Planning
- Actus Me Invite Factus Non Est Meus Actus
