Deferred Compensation Plan For Executives In North Carolina
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Multi-State
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US-00418BG
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Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which the income is actually earned. A Deferred Compensation Agreement is a contractual agreement in which an employee (or independent contractor) agrees to be paid in a future year for services rendered. Deferred compensation payments generally commence upon termination of employment (e.g., retirement) or death or disability before retirement. These agreements are often geared toward anticipated retirement in order to provide cash payments to the retiree and to defer taxation to a year when the recipient is in a lower bracket. Although the employer's contractual obligation to pay the deferred compensation is typically unsecured, the obligation still constitutes a contractual promise.
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The 457(b) is a supplemental retirement plan that allows employees to set aside payroll-deducted contributions on a pre or after-tax basis. An executive deferred compensation plan allows highincome employees to put off paying taxes on part of their income until retirement.A 457(b) plan is a tax-deferred retirement savings plan. Funds are withdrawn from an employee's income without being taxed and are only taxed upon withdrawal. A non qualified deferred compensation plan is a strategy companies use to provide additional supplemental benefits to their key people. Eligible employees may enroll in the NC Deferred Compensation Plan (457) at any time.