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Design and Oversight of Executive Compensation Plans
Independent advisory aligning non-qualified plan structures with organizational strategy, executive retention goals, and long-term incentive frameworks.
Retirement Plan Advisory
Explore our fiduciary advisory services for employer-sponsored retirement plans. Select a service below to preview our approach — then visit the full page for a deeper look.
Deferred Compensation Beyond the Limits of Qualified Plans
Qualified retirement plans — 401(k)s, profit sharing, even Cash Balance Plans — have IRS limits on how much can be contributed each year. For executives and business owners whose income far exceeds those limits, non-qualified deferred compensation (NQDC) plans offer a way to defer additional income on a tax-deferred basis, with no cap on the amount.
But NQDC plans come with a critical tradeoff: the deferred money sits on the employer's balance sheet as an unsecured promise to pay. There's no ERISA protection, no PBGC insurance, and no creditor protection for participants. If the company goes bankrupt, NQDC participants are general unsecured creditors — behind secured lenders and bondholders in line.
That's why NQDC plans need ongoing advisory oversight — not just at setup, but every year. Bull Run Investment Management, LLC ("BRIM") provides independent advisory on plan design, funding strategy, participant deferral decisions, investment allocation, distribution planning, and coordination with qualified plans. We help employers design plans that retain key people, and we help participants make informed decisions about how much to defer and when to take it out.
How BRIM Helps Employers and Participants
Most employers set up an NQDC plan on the advice of their attorney and then never think about it again. BRIM brings ongoing investment oversight, participant counseling, tax coordination, and 409A compliance monitoring — the disciplines that make the plan work as both a retention tool and a wealth-building vehicle.
Plan Design Advisory
Helping employers decide whether to offer NQDC, what structure to use, who should be eligible, and how the plan fits into their total compensation strategy for retention and recruitment of key executives. Bobby Feisee, Esq. handles the legal document.
Investment Strategy & Funding
Many NQDC plans are informally funded through a rabbi trust or corporate-owned life insurance (COLI). BRIM advises on the investment allocation inside the trust, and coordinates COLI policy selection through DPL Financial Partners — commission-free, as always.
Participant Deferral Counseling
The biggest decision any NQDC participant faces: how much to defer. We help executives evaluate the trade-off between current income and future payout — factoring in credit risk, tax rates, liquidity needs, and the irrevocability of 409A elections.
Distribution & Tax Planning
Section 409A distribution rules are rigid — election changes must be made 12+ months in advance, and mistakes trigger a 20% penalty plus interest. Brian Wendroff, CPA models the tax impact of distribution timing across retirement years and coordinates with your broader income plan.
Credit Risk Assessment
The question most advisors never ask: should you really leave hundreds of thousands — or millions — on your employer's balance sheet? We assess the employer's financial health, evaluate informal funding mechanisms, and help participants quantify the risk they're taking.
Qualified Plan Coordination
NQDC is most powerful as the third layer: 401(k) + Cash Balance + NQDC. BRIM and TRPC manage the qualified plan side, and we integrate the NQDC strategy so deferral amounts, contribution timing, and distribution schedules all work together — not in silos.
How We Advise on Non-Qualified Plans
Whether you're an employer considering an NQDC plan for the first time or an executive trying to decide how much to defer this year, our process is built to surface the risks, model the tax outcomes, and deliver a clear recommendation.
Plan Assessment or Design
For employers: we evaluate whether NQDC makes sense for your retention goals, what type of plan to offer, and how to structure it alongside your existing qualified plans. For participants: we review the plan document, understand the investment options, and assess the employer's financial health.
Deferral Election Modeling
Before any irrevocable election is made, Brian Wendroff models the tax impact across multiple scenarios — varying deferral amounts, distribution years, and tax rate assumptions. We factor in credit risk tolerance, liquidity needs, and how the deferral interacts with your 401(k), Cash Balance Plan, and personal investment portfolio.
Investment & Funding Strategy
For informally funded plans, BRIM advises on the investment allocation inside the rabbi trust or manages the selection of COLI policies through DPL. We align the investment strategy with the plan's payout timeline and the employer's overall financial position.
Distribution Planning & 409A Monitoring
We plan distributions years in advance — because 409A requires it. Election changes must be made at least 12 months before the scheduled payout and must defer the payment by at least 5 years. We track every deadline and model the tax impact of each distribution against your projected retirement income.
Ongoing Annual Review
Each year before the election deadline, we revisit the deferral decision — updating the credit risk assessment, refreshing the tax projections, and adjusting the investment allocation. For employers, we review plan effectiveness as a retention tool and recommend design changes if the competitive landscape has shifted.
Types of Non-Qualified Plans We Advise On
Non-qualified plans come in several forms — each serving a different purpose in the employer's compensation strategy. We advise on the design, funding, and ongoing management of all major NQDC structures.
Elective Deferral Plans
The executive voluntarily defers a portion of salary or bonus into the plan. Elections are made before the compensation is earned (typically by December 31 of the prior year) and are irrevocable under 409A. The most common form of NQDC — and the one where participant counseling adds the most value.
Supplemental Executive Retirement Plans
SERPs are employer-funded — the company promises a specific retirement benefit to select executives, typically based on a formula tied to salary and years of service. Used primarily as a retention and recruitment tool for C-suite and senior leadership. The employer bears the full funding obligation.
Excess Benefit Plans
Designed to "restore" the benefits that highly compensated employees lose due to IRS limits on qualified plans. If the 401(k) contribution cap or the $360,000 compensation cap reduces an executive's benefit, the excess plan makes up the difference — keeping the retirement formula whole.
Phantom Stock & SARs
Phantom stock and stock appreciation rights (SARs) provide executives with equity-like upside without actual share ownership. The payout is tied to the company's stock price or enterprise value — making them powerful retention tools for private companies that can't issue public equity.
Split-Dollar Life Insurance
An arrangement where the employer and executive share the costs and benefits of a life insurance policy. Often used to informally fund NQDC obligations or provide supplemental death benefits. BRIM coordinates policy selection through DPL Financial Partners — commission-free.
Rabbi Trusts & COLI
Rabbi trusts and corporate-owned life insurance (COLI) are the most common informal funding vehicles for NQDC plans. The assets remain on the employer's balance sheet (creditors can reach them in bankruptcy) but provide a dedicated pool of assets to meet future payout obligations.
What You Need to Understand Before You Defer
NQDC plans offer powerful tax deferral — but the risks are real and the rules are unforgiving. These are the critical considerations we walk every participant and employer through before a single dollar is deferred.
Employer Credit Risk
Your deferred compensation is an unsecured promise to pay. If your employer files for bankruptcy, NQDC participants are general unsecured creditors — behind banks, bondholders, and secured lenders. We assess the employer's financial stability before recommending any deferral.
Section 409A Penalties
Violating 409A distribution rules triggers a 20% additional tax plus an interest penalty calculated from the original deferral date. Common violations: late elections, improper acceleration of payments, and failure to meet the 12-month / 5-year re-deferral requirements. The penalty is on the participant, not the employer.
Irrevocable Elections
Deferral elections must be made before the compensation is earned — typically by December 31 of the prior year for salary, and before performance-based bonus criteria are established. Once made, elections cannot be changed for that year. You're committing to future income reduction without knowing what next year will look like.
Tax Rate Uncertainty
The core bet of NQDC is that your tax rate will be lower when you receive the payout than when you earned it. But tax rates change — and if rates rise significantly between deferral and distribution, the tax deferral advantage can evaporate or even reverse.
No Early Access
Unlike a 401(k), there's no hardship withdrawal, no loan provision, and no early distribution option (except in very narrow circumstances defined in the plan). Once you defer, the money is locked until the scheduled distribution event — separation from service, disability, change of control, or a fixed date.
Estate & Beneficiary Planning
NQDC balances are included in your taxable estate and are subject to income tax when distributed to beneficiaries — creating a potential "double tax" on inherited NQDC. Bobby Feisee coordinates beneficiary designations and estate structures to mitigate this exposure.
One Team, Navigating the Most Complex Compensation Plans
NQDC sits at the intersection of tax, legal, investment, insurance, and employment law. BRIM coordinates every specialist — so your deferral decisions, distribution planning, and funding strategy are fully aligned.
The Set-It-and-Forget-It Plan vs. The BRIM Approach
Deferred Compensation Is Powerful — but Only If It's Managed
Whether you're an employer designing a plan to retain key executives or a participant trying to decide how much to defer — we'll help you make informed decisions with the risks and tax impact fully understood.
Questions? Seeking Further Insight?
Connect with our team to discuss your goals. No obligations, no pressure — just a straightforward conversation about how we can help.
Questions? Seeking Further Insight?
Connect with our experts at BRIM.