TYPES OF PLANS

Click on any of the following links to learn the details of each of these plans:

401(k) Plans
Safe Harbor 401(k) Plans
Profit Sharing Plans
Money Purchase Plan
Defined Benefit Plan
403(b) Plan
457(b) Plan
Deferred Compensation Plans

Why should I Install A Company Sponsored Retirement Plan For My Employees?

Today's typical employees are brighter and more financially perceptive than ever. Today's employers have learned that if they are to remain competitive in the attraction and retention of top-notch quality employees, they must provide a company sponsored, cost-effective and competitive employee retirement plan benefit. Employers no longer have the option of choosing whether to provide a retirement plan for their employees, or not. The fact is that too many respected surveys have proven that employees rank retirement plans among their highest benefit priorities.

The good news is that since employer contributions to a company sponsored retirement plan are a tax-deductible expense; employers experience an immediate tax break as they provide this employee benefit. Employees understand that as their employer uses a company sponsored retirement plan to hire and keep good people, an employee can use such a benefit to take advantage of sound tax-deferred investment earnings to accelerate the growth of their retirement savings.

What Are My Options In Choosing The Right Plan For My Company's Employees?

Today's retirement plans provide significant flexibility and control to employers. Employers may decide how to fund their plan, as well as what employees are eligible to participate in their plan. Employers can control when their employees are vested in their plan and what types of investment funds are to be available to their employees. Employers are also able to decide the degree of control employees have over investments and how employer contributions are allocated.

Because different types of retirement plans provide different opportunities for both employer and employee, the following is a brief overview of some of the plans available to you.

After reviewing these summaries, should you have any questions or should you wish to discuss the different plans in more detail, please fell free to contact us at 888.689.5530 ext.223 or info@retirementplanners.com.

401(k) Plans

There are no limitations, large or small, as to the number of employees that may be included in the conventional 401(k) plan. For employers with 25 employees or more, 401(k) Plans have become the most popular plan selected to meet their retirement plan benefit needs. The conventional 401(k) plan allows employees to defer a percentage of their income on a pre-tax basis into the plan, up to a general limit of $13,000 (as indexed for 2004) and $14,000 (as indexed for 2005) or 100% of compensation, whichever is less.

Additionally, the conventional 401(k) plan allows an employer to provide matching contributions or profit sharing contributions to the plan. Though these contributions are not required and can be constructed in a variety of different formulas, the ability to have three sources of contributions-deferral, match, and profit sharing - make the standard 401(k) plans the most flexible, defined contribution plan.

An example of a matching contribution is 50 cents of each dollar deferred up to the first 6% of the employees salary, for maximum employer exposure of 3% of compensation, is common. Also, profit sharing contributions are discretionary and can use various allocation methods to fit your organization's needs.

CONVENTIONAL 401(K) PLAN OVERVIEW
PRIMARY BENEFITS	Allows both employee deferral and employer contributions High degree of design flexibility May apply eligibility criteria Flexible vesting schedule Loans available Alternative contribution allocation methods permitted
NOTE ALSO	Generally requires more employee education and communication Non-discrimination testing may limit contributions for highly compensated employees [HCEs] Involves top-heavy testing Government reporting required Distribution restrictions
Conventional 401(k) Detailed Summary
Plan Size	Businesses of all sizes
Plan Adoption And Contribution Deadlines	Must be established by the employer's fiscal year end. Employer matching contributions or non-elective contributions must be made by employer's tax-filing deadline, including extensions. Employee pre-tax salary deferrals must be deposited by 15th business day following the month of deferral, or sooner if administratively feasible.
Employee Eligibility Requirements	Flexible, however employees who are at least 21 years old with 1,000 hours of service in a year are generally eligible to participate in the plan Employer may set less restrictive eligibility standards Employer can exclude classes such as union employees
Funding	Employee-funded Employer contributions are optional
Maximum Annual Contributions	Employees can contribute up to $13,000 [in 2004] (as indexed for cost of living) Employer may make matching and/or profit sharing contributions. Total contributions limited to 100% of participant's annual compensation up to $41,000.
Vesting	Participants are always 100% vested in employee contributions. Employer contributions may have a vesting schedule selected by the employer. Though there is a broad diversity of vesting schedules from which an employer may choose, including, but not limited to a three (3) year "cliff", the most popular is a six (6) year graded with 20% increments starting with the employee's second (2nd) year of service.
Withdrawals And Loans	Withdrawals are taxed as ordinary income and are subject to a 10% tax penalty unless taken after the attainment of age 59.5 or because of death, disability. Availability of hardship withdrawals. Availability of loans.
Administration And Reporting	Top-heavy and non-discrimination testing required Annual limits testing and loan tracking required Required filing of IRS Form 5500 Requires a Summary Plan Description and a Summary Annual Report A fidelity bond is required Audit generally required for plans over 100 employees

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NOTE: The Economic Growth and Tax Relief Reconciliation Act of 2001 [EGTRRA] has brought about sweeping changes in the rules governing retirement plans. Please consider these changes as you address issues surrounding your retirement plan decisions. For more detailed information and answers to specific questions about this new Federal legislation please visit the Federal Legislation Update section of this website or contact us directly at 888.689.5530 ext.223 or e-mail us at info@retirementplanners.com.

Safe Harbor 401(k) Plans

A variation of the conventional 401(k) Plan, that allows plan sponsors to fundamentally "buy" their way out of the Actual Deferred Percentage (ADP), Actual Contribution Percentage (ACP) and top-heavy tests, is the Safe Harbor 401(k) Plan.

To take full advantage of the Safe Harbor provision of the 401(k) plan, an employer must make one of the non-discretionary contributions to the plan each year shown in the table below. To insure full compliance, the employer is also required to make either of these contributions 100% fully vested.

SAFE HARBOR 401(K) PLAN
EMPLOYER COMPLIANCE CRITERIA

EMPLOYER MATCH

Employers must match ALL OF THE FIRST THREE PERCENT (3%) of compensation deferral into the plan, plus HALF OF THE NEXT TWO PERCENT (2%) of compensation deferral. Accordingly, the maximum potential contribution for an employee is four percent (4%) of compensation. (100% x 3% + 50% x 2%). Employers may use alternative match formulas if the total match benefit is equivalent to the "Safe Harbor" formula. The employer may not require any "hours of service" condition or employment on the last day of the plan year to receive a contribution. To insure full compliance, the employer is also required to make these contributions 100% fully vested.

- - -OR - - -

EMPLOYER PROFIT SHARING CONTRIBUTION

Employers must contribute at least three percent (3%) of compensation to the plan for all eligible non-highly compensated employees. The employer must make this contribution whether or not the employees have deferred compensation into the plan. Again, the employer may not require any "hours of service" condition or employment on the last day of the plan year to receive a contribution. To insure full compliance, the employer is also required to make these contributions 100% fully vested.

As an employer, if you anticipate or if you are experiencing high levels of participation in your 401(k) plan, it may be better for your company to make an across the board three percent (3%) contribution rather than provide a minimum employer match as shown above.

SAFE HARBOR 401(K)
PLAN OVERVIEW

PRIMARY BENEFITS

Allows employee deferral
Allows highly compensated employees to make maximum contributions ($13,000 in 2004 / $14,000 in 2005) with no restrictions
Avoids non-discrimination testing on deferrals and match
Some degree of design flexibility
May apply eligibility criteria
Loans available
Can have vesting on other contributions above the 3%

Safe Harbor 401(k) Detailed Summary
Plan Size	Businesses of all sizes
Plan Adoption And Contribution Deadlines	Typically, plans are administered on a calendar-year basis and new plans must be set up and adopted by plan year end. Employer matching contributions or non-elective contributions can be accrued but must be made by employer's tax-filing deadline, including extensions. Employee pre-tax salary deferrals must be deposited by 15th business day following the month of deferral, or sooner if administratively feasible.
Employee Eligibility Requirements	Flexible, however employees who are at least 21 years old with 1,000 hours of service for at least one year are generally eligible to participate in the plan. Employer may set less restrictive eligibility standards.
Maximum Annual Contributions	Employees can make pre-tax salary deferrals up to ninety five percent (95%) of annual compensation or $13,000 (in 2004) which ever is less. Employer must provide a dollar-for-dollar match on employee deferrals up to 3% of compensation, and a 50% match on the next 2% of compensation deferred (limited to $205,000) which may not be reduced. Instead of matching contributions, employer may make a non-elective contribution of 3% of compensation (limited to $205,000) for all eligible employee. Additional employer match or non-elective contributions may be made. Total contributions limited to 10% of compensation, or $40,000, which ever is less.
Vesting	Participants are always 100% vested in required employer Contributions under Safe Harbor. Additional contributions may be subject to vesting schedule.
Withdrawals And Loans	Upon withdrawal, money is taxed as ordinary income and subject to a 10% tax penalty, unless taken after the attainment of age 59.5 or because of death or disability. Availability of hardship withdrawals.
Administration And Reporting	Employees must be notified the plan's intention to use the Safe Harbor thirty (30) days before the beginning of a plan year. 415 testing and loan tracking required Required filing of IRS Form 5500 Requires a Summary Plan Description and a Summary Annual Report

Comparative Analysis Conventional 401(k) Plan vs. Safe Harbor 401(k) Plan
.	CONVENTIONAL 401 (K) PLAN	*SAFE HARBOR* 401 (K) PLAN
PLAN SIZE	Any Size	Any Size
EMPLOYEE CONTRIBUTION	Lesser of compensation	Lesser of compensation
EMPLOYER CONTRIBUTION	Optional matching and profit sharing, flexible allocation formulas	Mandatory, must follow plan formula
MAXIMUM EMPLOYER DEDUCTION	25% of eligible compensation	25% of eligible compensation
MAXIMUM INDIVIDUAL ALLOCATION	Lesser of 100% of compensation or $40,000 SUBJECT TO TESTING	Lesser of compensation NOT SUBJECT TO TESTING
VESTING	Employer can choose schedule	100% immediately on mandatory contribution with flexible vesting schedule on additional contributions
HARDSHIP WITHDRAWALS	Available	Available
LOANS	Available	Available
OPTION TO RESTRICT ELIGIBILITY	Available	Available
NON-DISCRIMINATION TESTING	Plan must be tested at least once a year	Testing only required on additional employer contributions

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Profit Sharing Plans

A Profit Sharing Plan clearly favors businesses with unpredictable earnings, since employer contributions to these plans are discretionary rather than required. If your company wants to control critical plan features like participant eligibility and vesting in your company sponsored retirement plan, you might consider sponsoring a Profit Sharing Plan. This plan is funded solely through discretionary employer contributions and is widely considered the most simplistic qualified retirement plan.

Total profit sharing contributions may not exceed 25% of total eligible payroll. A combination of profit sharing plan with a Money Purchase Plan allows for greater total contribution while retaining a degree of flexibility [SUBJECT TO CHANGES IN THE LAW UNDER EGTRRA IN 2002].

Also, non-vested account balances which have been forfeited by terminated employees may be redistributed to the accounts of remaining participants or used to reduce the employer's future contributions. In addition, provisions for loans and hardship withdrawals may also be included in the design of the plan.

So, if your circumstances require significant employer flexibility in determining which employee can participate in your company's plan, or how the contributions will be allocated and when those contributions are vested, then consider the following details of the Profit Sharing Retirement Plan.

PROFIT SHARING PLAN
OVERVIEW

PRIMARY BENEFITS

Discretionary employer contributions
Flexible vesting schedule
Alternative contribution allocation methods permitted
May apply eligibility criteria
Loans and hardship withdrawals allowed

NOTE ALSO

Involves top-heavy testing; moderate administration required
Funded solely by employer
Government reporting required

PROFIT SHARING PLAN DETAILED SUMMARY
Plan Size	Businesses of all sizes Individuals with self-employment income, earned on either a full or part-time basis
Plan Adoption And Contribution Deadlines	Must be established by the employer's fiscal year end Employer contributions must be made by employer's tax-filing deadline, including extensions
Employee Eligibility Requirements	Flexible, however any employee 21 years old with 1,000 hours of service per year for two or more years must be eligible for the plan
Funding	Employer-funded only Contributions are discretionary May utilize various allocation methods
Maximum Annual Contributions	Maximum contribution allocated to an employee of 100% of participant's annual compensation or $41,000, whichever is less, but may be limited by other tests and or limits. Maximum overall plan contribution limited to 25% of company eligible payroll Maximum overall contribution for sole proprietor or partnership plan sponsors limited to 13.04% of net profit or partnership income
Vesting	Dependent on vesting schedule selected by the employer With a one year of service requirement vesting may be graded for a period up to seven years (If two years of service are required for eligibility, contributions must be 100% vested immediately)
Withdrawals And Loans	Withdrawals are taxed as ordinary income and are subject to a 10% tax penalty unless taken after the attainment of age 59.5 or because of death or disability Availability of hardship withdrawals Availability of loans
Administration And Reporting	Employees must be given notice when the plan is established and new employees must be notified when eligible Top-heavy and non-discrimination testing required Annual limits and loan tracking required Required filing of IRS Form 5500 Requires a Summary Plan Description and a Summary Annual Report

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Money Purchase Pension Plan

[Note: Effective in 2002, under the changes in the law under EGTRRA, money purchase plans will effectively become obsolete.]

If your business is consistently profitable and you are an employer who wants to reward key employees with a generous retirement benefit; or if you are self employed individuals who would like to tax-shelter as much income as possible, then you should seriously consider sponsoring a Money Purchase Pension Plan.

Unlike a Profit Sharing Plan where employer contributions are optional, under a money Purchase Pension Plan, employer contributions are mandatory and the employer contributes a fixed amount or a fixed percentage of compensation on an annual basis. Changing the contribution requires a plan amendment which the IRS will only allow if the change is infrequent. The "up side" is that such plans, funded solely by the employer, permit higher total contributions to as much as 25% of compensation.

Similar to profit sharing plans, money purchase pension plans may allow the exclusion of some employees by using eligibility criteria and give the employer a greater degree of control in determining when employees are vested.

MONEY PURCHASE PENSION
PLAN OVERVIEW

PRIMARY BENEFITS

Higher overall plan contribution limits than profit sharing plan up to 25%
Flexible vesting schedule
Alternative contribution allocation methods permitted
May apply eligibility criteria
May be paired with other tax favored retirement plans
Loans available

NOTE ALSO

Employer contributions are fixed and mandatory
Funded solely by employer
Involves top-heavy testing; moderate administration and paperwork
Government reporting required
Distribution restrictions

Money Purchase Pension Plan Detailed Summary
Plan Size	Businesses of all sizes Individuals with self-employment income, earned on either a full or part-time basis
Plan Adoption And Contribution Deadlines	Must be established by the employer's fiscal year end Employer contributions must be made by employer's tax-filing deadline, including extensions
Employee Eligibility Requirements	Flexible, however any employee 21 years old with 1,000 hours of service per year for two or more years must be eligible for the plan
Funding	Employer-funded only Contributions are discretionary May utilize various allocation methods
Maximum Annual Contributions	Maximum contribution allocated to an employee of 100% of participant's annual compensation or $41,000, whichever is less Maximum overall plan contribution limited to 25% of company eligible payroll Maximum overall contribution for sole proprietor or partnership plan sponsors limited to 13.04% of net profit or partnership income
Vesting	Dependent on vesting schedule selected by the employer With a one year of service requirement vesting may be graded for a period up to seven years (If two years of service are required for eligibility, contributions must be 100% vested immediately)
Withdrawals And Loans	Withdrawals are taxed as ordinary income and are subject to a 10% tax penalty unless taken after the attainment of age 59.5 or because of death or disability Availability of hardship withdrawals Availability of loans
Administration And Reporting	Employees must be given notice when the plan is established and new employees must be notified when eligible Top-heavy and non-discrimination testing required Annual limits and loan tracking required Required filing of IRS Form 5500 Requires a Summary Plan Description and a Summary Annual Report

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Defined Benefit Plan

A primary difference between the "Defined Contribution Plans" like the 401(k) Plan or Profit Sharing Plan and a "Defined Benefit Plan" is that the investment risk under a "Defined Contribution" Plan lies with the employee participant and the investment risk under the "Defined Benefit" Plan lies with the employer sponsor.

The "Defined Benefit" Plan defines and promises a specific benefit at some point in the future. This defined benefit is provided typically at the retirement of the employee participant. For example, a typical benefit may be a monthly income starting at age 65 equal to 50% of the employee's average salary over the last three years of work.

The employer is required to contribute, and may deduct, whatever amount is actuarially necessary to assure the benefit is funded, which places the investment risk with the employer, not the participant. If the investments do not perform as projected, the employer may have more to contribute in the future.

Because benefit accrual tends to reward long-term service, and because with older employees there is less time for assets to accumulate to fund the benefit, contributions for older employees generally are much higher than younger employees. Thus, older business owners, seeking large contributions often favor defined benefit plans.

For aging management groups who have little chance to save for retirement, a defined benefit plan is an excellent way to make up for lost time. A defined benefit plan provides the only way for companies to make annual tax-deductible contributions for their employees in excess of $41,000 or 100% of pay [the maximum for "defined contribution" plans].

For example, the following are the maximum contributions for 2004 that are tax deductible for defined benefit plans and defined contribution plans:

Comparative Analysis
Defind Benefit Plan vs. Defined Contribution Plan

SCENARIO #1
Company owner is age 50 and earns more than $205,000. Two other employees age 25 and 30 earn $25,000 and $30,000 respectively.

Age 50 $65,000 $41,000

Age 25 1,800 5,000

Age 30 3,000 6,000

SCENARIO #2
Company executives are ages 55 and 50 and earn more than $205,000 each. Two other employees age 25 and 30 earn $25,000 and $30,000 respectively.

Age 55 $117,000 $41,000

Age 50 65,000 41,000

Age 25 1,800 5,000

Age 30 3,000 6,000

However, because of the required funding costs, and potential growing funding liability for older employees, the number of defined benefit plans has dropped over the past decade. As the baby boom of employees is growing older and becoming more transitory in employment, larger employers have steered away from defined benefit plans to employee participatory plans such as 401(k) plans.

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403(b) Plans

The 403(b) is a tax deferred retirement plan available to employees of educational institutions and certain non-profit organizations. Participants contribute to either annuity contracts with insurance companies or invest in mutual funds. Contributions and investment earnings grow tax deferred until withdrawal (assumed to be retirement), at which time they are taxed as ordinary income.

The name 403(b) refers to the relevant section in the Internal Revenue Code. You can obtain a copy of the IRS Publication 571, which discusses the 403(b) plan in detail by calling 1-800-829-3676 or it may be downloaded by clicking on IRS Publications and scrolling to Publication 571 Tax Sheltered Annuity Programs.

403(b)(7) Plan Detailed Summary
Plan Size	Educational Institutions and certain non-profit organizations of all sizes
Plan Adoption And Contribution Deadline	Must be established by the employer's fiscal year end. Employer matching contributions, if applicable, must be made by end of employer's fiscal year, including extensions Employee pre-tax salary deferrals must be deposited by 15th business day following the month of deferral, or sooner if administratively feasible
Employee Eligibility Requirements	Any employee 21 years old with 1,000 hours of service per year for two or more years must be eligible for the plan
Funding	Employee-funded Employer contributions are optional, but if used will require compliance testing
Maximum Annual Contributions	Maximum employee annual contribution is $13,000, subject to certain limitations in Maximum Exclusion Allowance (maximum contribution number) such as salary, years of service with current employer and prior tax deferred contributions A Special "catch-up election" allows participant to increase elective deferral limit for any calendar year by $3,000 more than the indexed limit. To qualify participant must have completed at least 15 years of service with the same employer. (The years of service need not be consecutive). In most cases, contributions made under this catch-up provision cannot exceed $3,000 per year, up to a a $15,000 lifetime maximum (under current rules) Refer to IRS Publication 571 on IRS Publications Web site and scrolling to Publication 571
Withdrawals And Loans	Withdrawals are taxed as ordinary income and are subject to a 10% tax penalty unless taken after the attainment of age 59.5 or because of death or disability Availability of loans and hardship withdrawals
Administration And Reporting	Required filing of IRS Form 5500 Requires a Summary Plan Description and a Summary Annual Report

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457(b) Plans

Named after IRS code 457, a 457(b) plan is a non-qualified deferred compensation plan for states, counties, cities, agencies, and their political subdivisions or agencies. Deferred compensation is a contractual agreement between an organization and an employee wherein the organization makes an unsecured promise to defer the compensation of the employee to some future date for services currently performed by the employee. Annual contributions are made through salary deduction up to $13,000 or 100% of salary [under EGTRRA], whichever is less. Distributions are made upon retirement, termination of employment, extreme financial hardship or at death to the named beneficiaries.

One nice benefit of the 457 plan is that in the last three years before the plan's normal retirement age, a participant can "catch up" on contributions missed in earlier years, with some restrictions.

Upon retirement, participating employees have various options for withdrawing funds. They can take out a lump sum, purchase an annuity or simply start drawing out money on a periodic basis from their current account. Unlike most other retirement plans, withdrawals may be taken from a deferred compensation account upon separation from service without incurring the 10% penalty for early distributions, even prior to age 59.

457(b) Deferred Compensation Plan Detailed Summary
Plan Size	State, county or municipal governments and their agencies, or a private tax-exempt organizations of all sizes
Plan Adoption And Contribution Deadlines	Must be established by the employer's fiscal year end. Employer matching contributions, if applicable, must be made by end of employer's fiscal year, including extensions Employee pre-tax salary deferrals must be deposited by 15th business day following the month of deferral, or sooner if administratively feasible
Employee Eligibility Requirements	Governmental employer has complete discretion, subject to state law Tax-exempt employer must limit participation to "top hat" group
Funding & Maximum Contributions	Employee-funded. The lesser of 33 1/3% of includible compensation contributions (gross salary less all pre-tax deferrals) or $13,000 per year (indexed) in 2003, less any employer contributions Employer contributions are optional. Maximum employer contribution up to $13,000 (indexed) in 2003, less any employee contributions Catch Up provision is available, if eligible, up to $15,000 contribution limit per calendar year for three years prior to normal retirement age Rollovers only allowed from other 457(b) plans
Withdrawals & Loans	Hardship withdrawals available only in the event of an unforeseeable emergency No loan provision available
Distributions	Distributions to employees upon separation from service, death, attainment of age 70?, or an unforeseeable emergency Upon separation, participant can make irrevocable election of an alternative commencement date to begin distributions. If employer's plan allows, participant can change, one time only, the decision made after retirement of when to begin receiving distributions
Administration And Reporting	Non-discrimination rules do not apply Requires a Summary Plan Description and a Summary Annual Report ERISA covered if employer is a tax-exempt (non-governmental) organization. If tax-exempt employer limits participation to "top hat" group, then exempt from most ERISA requirements, e.g. funding Trustee is not required, but plan assets for governmental plans must be held in trust in an annuity contract or a custodial account for the exclusive benefit of plan participants and their beneficiaries

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Deferred Compensation Plans - Supplemental Employee Retirement Plans [SERPS]

In instances where an employer wants to provide supplementary compensation for key executives or employees and wishes to defer payment into the future, a non-qualified deferred compensation plan may be an option to consider.

Assume for example, that an employer wants to induce a particularly valuable employee to remain with his company for a specific number of years. That employee could be motivated to do so on the promise from the company to pay him or her additional compensation upon the completion of a specific number of years of service with the company. This concept is called "golden handcuffs".

In another case, the principals of a company or a partnership may want to defer compensation for themselves or for themselves and their partners, to avoid paying taxes on that compensation this year. That employer principal cannot achieve these goals through a conventional retirement plan because the laws require them to provide benefits that are uniform and that don't discriminate in favor of key executives. Accordingly, the best arrangement for them to accomplish their goals may be through a nonqualified plan.

A "nonqualified," plan is simply a plan that is not subject to certain federal pension law provisions, such as nondiscrimination, eligibility, funding, and vesting. The trade off for not having to meet these special provisions in the laws is that a "nonqualified" plan does not get as many tax breaks as regular pension plans do.

The main downside under a "nonqualified" plan is that an employer's business income tax deduction is also deferred; the business is not entitled to a deduction for the deferred compensation until the funds are available to the recipient, which could be years away.

The following are a few of the uniquely variegated terms that describe some of the nonqualified plans available [SERPS]:

Golden parachutes: A golden parachute is an agreement between companies and their key personnel whereby the corporation agrees to pay amounts, often in excess of their usual compensation, to these key employees if there ever is a change in the management control of the corporation.
Golden handcuffs: A golden handcuff is an agreement between companies and their key executives under which the executives are paid supplemental retirement benefits if they meet certain conditions. The traditional use of such a plan is to motivate an executive or employee to remain with the company until a certain age. Golden handcuffs are designed to encourage long-term employment relationships.
Top-hat plans: A top-hat plan is an unfunded plan maintained primarily to provide deferred compensation to a select group of management or highly compensated employees. Special reporting and disclosure rules apply.
Rabbi trusts: A rabbi trust is a nonqualified deferred compensation arrangement in which amounts are transferred to an irrevocable trust to be held for the benefit of executive employees. The funds in the trust can still be reached by creditors of the company; for example, in a bankruptcy.

ALSO, PLEASE NOTE: Notwithstanding the informational descriptions outlined above, due to the complexity of these plans, it is imperative that employers discuss these employee benefit options with thier attorney or accountant to determine whether a nonqualified plan is appropriate in meeting the company's needs.

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