PLANADVISER - July/August 2018 - 37

2018 Recordkeeper Services Guide: NQDC Plans
P
rior to 2008, plan sponsors could find just two types of providers in the
nonqualified deferred compensation (NQDC) market: specialists, who offer
deep NQDC-specific expertise, and generalists, who offer NQDC administration
as a convenient add-on to their qualified plan business. Since then, the market
has become more blended, with the emergence of " hybrid " organizations capable
of delivering on both value propositions. Today, the market is almost evenly split,
with hybrid organizations totaling more assets/participants, and specialists
retaining more plans, which may explain why only 10% of the overall market
bundles NQDC plans with other services.
Generally speaking, NQDC plans are small-75% have fewer than 25 participants,
and 65% have less than $5 million in assets/liabilities-and are funded
via a rabbi trust (70%). Mutual funds are the most common source of funding
(75%), with corporate-owned life insurance (COLI) and business-owned life
insurance (BOLI) together running a distant second (15%). Approximately 20%
of NQDC plans are unfunded. Although they are small, NQDCs can be an important
but complex benefit for high-income employees/executives, so finding a
provider capable of delivering the right combination of knowledge, administration,
funding strategies and participant education is no less important than
decisions related to larger, more common plan types. -BOK
Total NQDC Plan Assets ($mm)
Top 10, by Total Participants
1 Fidelity Investments
2 Transamerica
3 Newport Group
4 Prudential Retirement
5 Alight Solutions
6 The Vanguard Group, Inc.
7 Bank of America Merrill Lynch
8 Principal Financial Group
9 Empower Retirement
10 Voya Financial
Top 10, by Total 409A NQDC Plans
1 Principal
2 The Pangburn Group
3 NFP
4 Fidelity Investments
5 Newport Group
2009
2010
2011
2012
2013
2014
2015
Total NQDC Assets, Plans and Participants

Total NQDC plan assets
$151,656
Plan Size
<$500k
$500k - $2.5mm
>$2.5mm - $10mm
>$10mm - $50mm
>$50mm

Total NQDC plans
9,253
Assets ($mm)§
$431
$2,701
$8,965
$27,632
$92,970
Plans§
2,397
2,130
1,693
1,245
526
*As of 12/31/2014; see plansponsor.com for more current numbers. †

Total NQDC
plan participants
760,451
Participants§
57,421
35,907
65,494
121,500
344,103
2016
2017
2018
6 Prudential Retirement
7 Voya Financial
8 Wells Fargo
9 The Nolan Financial Group
10 Bank of America Merrill Lynch
141,635
92,723
91,183
82,922
42,000
39,311
36,103
34,347
29,360
28,741
2,049
1,963
1,267
1,254
1,027
628
331†
263
232
225
Top 10, by % of NQDC Bundled Services‡
1 CUNA Mutual Retirement Solutions 100%
2 Fidelity Investments
3 T. Rowe Price
4 Charles Schwab
5 Bank of America Merrill Lynch
6 Conduent HR Services, LLC
7 ADP Retirement Services
8 Prudential Retirement
9 Principal Financial Group
10 USI Consulting Group
Not all providers report complete data, so data by plan size will not equal the overall total.
99%*
96%
90%
84%
79%
64%
54%
36%
26%
Results include totals from PenCal Plan Administrators, which was acquired in Q2.
‡Data includes only Section 409A plans; other plans sometimes grouped in this category-i.e., nongovernmental 457(b) and 457(f) plans-are reported
in 457 plan/asset/participant totals. §
planadviser.com july-august 2018 | 37
$48,926
$63,560
$60,162
$65,914
$72,768
$91,475
$96,599
$101,613
$104,454
$151,666

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