Brookline, MA (PRWEB) December 14, 2010
Regardless of whether tax rates increase after 2010, many executives and employees want to determine whether they should defer their compensation into a 401(k), 403(b), or nonqualified deferred compensation plan or whether they should take their compensation immediately. The recently launched website myNQDC.com (http://www.mynqdc.com), the only online resource exclusively devoted to nonqualified deferred compensation (NQDC), has enhanced its expert content with a unique calculator and modeling tool for NQDC. The Deferral Choices Comparison Calculator helps employees, executives, or their advisors with the crucial analysis of whether it is better to defer compensation or receive it now and invest it.
In a clear, flexible, and intuitive presentation, the tool shows the potentially important difference between: (1) deferring compensation, putting it into investments available through a nonqualified deferred compensation account, and receiving taxable distributions in the future; and (2) taking the compensation now, paying taxes on it, and putting the net into investments or a brokerage account.
People who use the tool see results in both an easy-to-understand graph and a table with numerical figures. Users have the ability to adjust all variables, including:
- length of deferral or investment
- rate of return on the investments, whether in a deferred compensation account or in a brokerage account
- federal and state tax rates for ordinary income and capital gains, both current and predicted
"This calculator is the only tool of its kind to perform this critical analysis for nonqualified deferred compensation," says Bruce Brumberg, Editor-in-Chief of myNQDC.com. "It can have a broader application too. In addition to helping with the financial planning for NQDC, the calculator works equally well for any other type of tax-deferred savings plan, such as a 401(k) plan or a regular IRA."
What Is Nonqualified Deferred Compensation?
In brief, nonqualified deferred compensation is a contractual arrangement between a company and a participant in its NQDC plan, usually an executive or other key employee. Based on the participant's elections, the NQDC plan defers a portion of current compensation, and the related taxes, to a payout date in the future, when the income is distributed and taxes are paid. In addition to gaining the potential benefits of tax deferral, the income may achieve tax-free growth through investments during the deferral period. In this sense, nonqualified deferred compensation is similar to qualified deferred compensation such as 401(k) plans, but with the crucial difference that NQDC participants can defer much more money and perhaps withdraw it penalty-free while still working. However, equally crucial is that amounts deferred under NQDC plans cannot be guaranteed, are not formally held or funded by the company, and are always subject to risks. Violations of the rules for NQDC plans, such as those under Internal Revenue Code Section 409A, result in immediate taxation and penalties.
For many corporate executives and other eligible key employees, nonqualified deferred compensation plans are a major and extremely valuable part of compensation. For companies, NQDC plans, whether elective types or supplemental executive retirement plans (SERPs), can be a powerful financial tool to recruit, retain, and reward executives and key employees, a priority for all businesses.
The goal of myNQDC.com is to provide educational content and tools for nonqualified deferred compensation plan participants, their advisors and attorneys, plan providers and administrators, and companies with NQDC plans. With clear writing and independent, unbiased expertise, myNQDC provides education about the financial planning, taxation, risk, and legal issues surrounding nonqualified deferred compensation and encourages participants to fully understand these topics and maximize the value of their plans. With tax rates likely to rise in the future, the tax-deferral advantages of NQDC will make these plans increasingly popular. myNQDC.com offers individual and group memberships, along with licensing its educational content for other websites and print materials.
The articles, FAQs, glossary, podcasts, and interactive quizzes at myNQDC.com draw upon the extensive knowledge of experts to help answer both basic and complex questions. All articles by outside contributors undergo an extensive process of internal review and editing before publication. The advisory board of myNQDC.com includes influential leading experts in nonqualified deferred compensation and the general field of executive benefits.
Corporate Licensing Available
The NQDC calculator, along with all the content on myNQDC.com, is ideally suited for licensing by plan providers, administration firms, consultants, and companies with nonqualified deferred compensation plans. A customized version can be seamlessly woven into companies' HR, benefits, and/or compensation portals. Accessible through any internet browser, 24 hours a day, 7 days a week, a licensed custom version of myNQDC.com lets executives answer their own questions about their NQDC whenever they need to learn more--saving time for administrative staff and costs for the company. For more information, visit http://www.mynqdc.com or call 617-734-1979.
Since 2000, myStockPlan.com has been a leading publisher of online educational content and tools on equity compensation (stock options, restricted stock/RSUs, performance shares, ESPPs); on nonqualified deferred compensation; and on the related taxation, financial planning, securities laws, and more. The company's major publications are the award-winning website myStockOptions.com (http://www.mystockoptions.com), covering the whole range of topics in stock compensation, and the newly launched myNQDC.com (http://www.mynqdc.com), covering all aspects of nonqualified deferred compensation.
Comprising both staff with a legal and tax background and contributing outside experts, the editorial team of myStockPlan.com specializes in making complex legal, tax, and financial-planning concepts understandable to people who do not enjoy reading the Internal Revenue Code or the securities laws. Both myStockPlan.com and its sister company Brumberg Publications have a long history of producing successful publications explaining complex legal and financial subjects in plain English.
The influential consumer magazine PC World ranks myStockOptions.com among "the most useful sites ever" that "deliver top-notch information, support, and services." The accounting journal CPA Wealth Provider selected myStockOptions.com among companies "that have taken the lead through innovation, efficiency, initiative, or growth in the financial-planning area." The Specialized Information Publishers' Foundation honored MSO Pro with one of its Editorial Excellence Awards in the category of Best Interactive Content among niche publishers. The innovative Comparison Modeling Tool on myStockOptions.com is now patented.
myStockOptions.com has also received extensive favorable coverage in major publications, including BusinessWeek, The Wall Street Journal, The New York Times, the San Francisco Chronicle, and The Boston Globe, and on CNN, National Public Radio, PBS, Money.com, and MarketWatch.com.
For more information, please contact Bruce Brumberg and Matt Simon at [email protected] or 617-734-1979.
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