Non-Qualified Deferred Compensation
Non-qualified deferred compensation is an arrangement established by employers to provice retirement and often death and/or disability benefits to selected managerial or highly compensated employees. When it's properly arranged, the employee can defer income taxation of the deferred amounts until the benefits are paid.
Deferred compensation arrangements are non-qualified, which means they don't have to be preapproved by the IRS and employers can discriminate in favor of selected employees. Also, when properly arranged they are exempt from ERISA's regulatory requirements.