A type of non-qualified pension plan that provides for salary deferral until retirement, death, disability or a predetermined date.
An agreement between an employer and an employee under which the employee will receive compensation during periods in which he or she is no longer working â€“ after retirement, death and/or disability.
A non-qualified benefit plan under which an employee defers current income to some future date. Under such an arrangement, the employer makes an unsecured promise to pay the employee future income. The employee is not taxed on the deferred income until it is distributed and the employer receives no tax-deduction for compensation until that same time. Permanent life insurance is a popular method of Deferred Compensation Plan funding. The plan usually provides retirement benefits to the employee and death benefits to the employee's beneficiaries.