PLANADVISER - Summer 2023 - 32

Client Service
The Need for NQDC Support
Fewer than half of recordkeepers offer 'top hat' services for HCEs
IN 2015, the nonqualified deferred compensation plan
market accounted for $80 billion. By 2022, it had ballooned
to $191 billion, says the PLANSPONSOR NQDC Market
Survey for that year (PLANSPONSOR, like PLANADVISER,
is owned by Institutional Shareholder Services Inc.). The
current leading firms by number of participants are retirement
plan service providers Fidelity Investments, Newport
Group and Empower, respectively, the research showed.
NQDC plans remain popular in drawing and retaining
highly compensated employees by offering a savings program
that goes beyond the limits of qualified retirement saving
plans. But, for the benefit to gain wider use, sources say, the
industry must see more providers, advisers and consultants
that know the plans step forward to meet the needs of a
growing number of potential participants.
" I think our challenge as an industry is to educate and
bring that next generation of consultants and folks who are
in the business along, " says Tony Greene, senior vice president
of business development for group benefits broker NFP
in New York City. He notes that NFP is taking part in industry
conferences and events that address NQDC advancement.
" I think that's probably the most important thing we
can do-just to continue to educate and get more people
comfortable with the concepts and how it works, " Greene
says. " Some of those will find that they like it, like I do, and
lean into this career, and we'll have the people we need to
continue to grow our business. "
According to industry experts, continued growth in the
space will come from being able to offer the service to a wider
range of employees, as more companies seek out NQDC
plans, and to customize a plan to an employer's needs.
" Anything that we can think up, or the consultant can
take up at an organization, we can put it on our platform
and do the administration for that particular plan design, "
says John Baergen, senior director of nonqualified plans at
Principal Financial Group in Addison, Texas. " So that gives
us a lot more flexibility, which allows plan sponsors to really
dial in exactly the kind of features they want in their plan. "
Meeting Needs
With a specialty in nonqualified services, Principal has a
consulting team composed of a dozen staff who average 25
years of experience. The firm has an administrative platform
that can perform anything these 409A plans provide
for, Baergen says.
Principal also supplies all model documents, accounting
features and trust services to these plans. Baergen says one
of the offered services is known as a " rabbi trust, " because
its first usage was by a synagogue for its rabbi, but it is technically
a grantor trust, which is a way to add further security
to a nonqualified plan.
Greene says NFP is not only focused on retirement saving
add-ons for nonqualified plans, but also on addressing the
areas where qualified plans tend to leave the HCE group
32 planadviser.com | Summer 2023 | Awards & Innovation
Art by Anja Sušanj
http://www.planadviser.com
PLANADVISER - Summer 2023

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