More employees eligible to participate in non-qualified deferred compensation plans did so in 2020 than in 2018, according to a survey released Tuesday from the Plan Sponsor Council of America.
Two-thirds of eligible employees participated in their employers' NQDC plans in 2020, deferring an average of 10.5% of base pay. That's up from 53.4% who participated in 2018, the survey found.
Still, the number of total employees participating in the plans is small with only 6.1% of total employees eligible to participate in them. In 2018, an average of 5.2% were eligible to participate.
Employers that offer NQDC plans cite employee recruiting and retention as the top reasons for offering the plans, according to the survey.
"Employers have long provided access to NQDC plans to their management team and key employees to help attract and retain top talent," said Nevin Adams, head of research and chief content officer for the American Retirement Association, the umbrella group under which PSCA operates.
The survey also found a strong uptick in employer efforts to educate employees about the plans. More than 70% of organizations now provide NQDC-specific plan education to eligible employees, up from 55.9% in 2018, according to the survey findings.
Investment advice related to NQDC plans also increased, with 40% of organizations offering it, up from 23.2% two years ago.
PSCA surveyed more than 100 NQDC plans for the 2020 plan year.