Definition - What does Non-Qualified Plan mean?
A non-qualified plan is an employee retirement plan that does not fall under the government's Employee Retirement Income Security Act.
Non-qualified plans are designed mostly for higher income employees, such as company executives.
Insuranceopedia explains Non-Qualified Plan
A non-qualified plan is often offered to a high-ranking employee when the employer can't make them a partner or part-owner of the company. Non-qualified plans tend to offer more generous retirement benefits than those issued through the Employer Retirement Income Security Act. While ERISA plans are available to all employees, it is the employer's discretion who (if anyone) will be enrolled in a non-qualified plan.
A non-qualified plan is tax-deferred until retirement, where distribution of the benefits typically begin.
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