SOURCE: MullinTBG

March 20, 2008 10:05 ET

Nine in 10 Employers Now Offering Deferred Comp Plans to Their Execs, Finds 2007 MullinTBG/PLANSPONSOR Survey

Survey Confirms Growing Trend Away From Qualified Benefit Plans

LOS ANGELES, CA--(Marketwire - March 20, 2008) - Voluntary nonqualified deferred compensation plans (NQDCPs) continue to be the leading type of nonqualified benefit program, now offered by more than 90% of employers, according to a newly released survey of public and private U.S. companies.

The 2007 MullinTBG/PLANSPONSOR survey, now in its second year, found that NQDCPs are being offered by even more companies, up from 85% a year ago. The prevalence of the plans is consistent among both large companies with revenues in excess of $1 billion and small companies with revenues less than $1 billion, and is also widely popular among both publicly traded and privately held firms.

NQDCPs are executive benefit programs in which participants defer income in exchange for an unsecured promise from the company to pay future benefits.

"The results of our survey indicate that corporate boards and executives at companies of all sizes and ownership classifications understand the need to implement executive benefit strategies that give them a competitive edge in the marketplace," said Jim Clary, president of MullinTBG, a leader in the design, funding and administration of nonqualified executive benefit plans. "NQDCPs continue to be a powerful tool for companies looking to attract and retain key executives, as well as provide additional retirement savings vehicles that will help compensate for the reduction of traditional pensions and other defined benefit plans."

According to Clary, the survey found a moderate decrease in the use of certain qualified benefit plans, such as 401(k) matching plans (4.4% have reduced or eliminated in the past five years), profit sharing plans (5.5% reduced or eliminated) and employee stock ownership plans (7.6% reduced or eliminated). However, the survey documented a sharp acceleration in the recent marketplace trend toward the elimination of the traditional defined benefit pension plan. Just over 28% of respondents reduced or eliminated these types of plans, which is more than double that of a year ago (12%).

Clary also noted that the practice of informal funding continues to be a popular way for companies to offset growing plan liabilities and provide some measure of benefit security, with more than two-thirds of respondents (67%) using this financing strategy. Mutual funds and corporate-owned life insurance (COLI) remain the top choices for informal funding vehicles over cash and company stock, especially for public companies, which make equal use of both mutual funds and COLI.

The MullinTBG/PLANSPONSOR survey solicited 2,061 companies and received usable responses from 384 companies within a wide range of industry profiles. Of the respondents, 70% were publicly traded, 93% were tax-paying entities and 68% had 2007 year-end revenues in excess of $1 billion.

MullinTBG is one of the nation's largest providers of nonqualified executive benefits, with more than 600 customized plans and $21 billion in total assets (as of 12/31/07) representing over 50,000 corporate executives. The firm operates a client service center from its Los Angeles headquarter and has regional offices in Baltimore, Chicago, Dallas, New York, Boston and Newport Beach, CA. For more information, please go to www.mullintbg.com.

Securities offered through M Holdings Securities, Inc., a Registered Broker/Dealer, Member FINRA and SIPC. MullinTBG and MullinTBG Insurance Agency Services, LLC are owned and operated independently from M Holdings Securities, Inc.

Contact Information

  • Media Contacts:
    Marilyn Haese or Daryn Teague
    Haese & Wood Marketing
    Email Contact
    (310) 556-9612