More About Nonqualified Plans

By Lisa Beyer

Oct. 11, 2011

The four major types of nonqualified plans, according to Investopedia.com, are:

Deferred compensation plans
Executive bonus plans
Group carve-out plans
Split-dollar life-insurance plans

Nonqualified deferred compensation plans are not funded by the employer and therefore, participants are considered general creditors of the company. This lack of a guarantee that the deferred compensation plan will be paid is one of the biggest drawbacks of these plans, according to Fidelity’s LifeDesign Financial Answer Center.

Lisa Beyer is a writer based in Florida.

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