PlanFacts

The Importance of Fiduciary Governance Advice for
Non-Qualified Plans

Non-Qualified plans are an excellent tool to help retain, attract and reward executives or highly compensated employees. These plans can provide participants additional tax-deferred benefits above the levels available in their 401(k) plan. The Wells Fargo 2018 Nonqualified Plan Benchmarking Survey found that 83% of the companies in their survey offer an executive deferred compensation plan.¹

While the popularity of non-qualified plans is high, many companies may not have the same governance oversight for these plans relative to their qualified plans. According to the same Wells Fargo Survey, 40% of the firms indicated that their nonqualified plans are not on a formal review schedule.

In recent years, the media and owners/shareholders have started to scrutinize companies’ executive pay and benefits. Many firms find themselves unprepared to handle the governance and oversight of their non-qualified plans.

Newport Group believes the key to effectively manage executive benefit plans is to establish and follow a prudent oversight process. As a leading national provider of non-qualified plan services, we work with a wide range of plans and sponsors to develop and implement a governance structure and process to demonstrate uniform governance across benefit plans.

Key areas to evaluate include:
  • Committee qualifications and membership
  • Meeting minutes
  • Committee charter
  • Investment policy statement
  • Investment monitoring
  • Asset/liability management
  • Reporting of committee activity to the board.

To learn more about how Newport Group can support you and your clients in this area, please contact your Newport Group representative.

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1Source: Wells Fargo. 2018. 

Investment advisory and consulting services are offered through Newport Group Consulting, LLC, a registered investment adviser and affiliate of Newport Group, Inc. 20190313-749119-2376555
 

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Newport Group, Inc. and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services. Fiduciary consulting services are provided through Newport Group Securities, Inc., an SEC-registered investment adviser and FINRA-registered broker-dealer, and Newport Group Consulting, LLC, an SEC-registered investment adviser. Newport Group Securities, Inc. and Newport Group Consulting, LLC are affiliates of Newport Group, Inc. All securities transactions are provided through Newport Group Securities, Inc., in its role as broker-dealer. All fiduciary consulting services are provided through the registered investment advisers. When offering variable insurance products, Newport Group Securities, Inc. acts solely in its capacity as a broker-dealer. Trust and custody services provided by Newport Trust Company, a New Hampshire state chartered trust company and wholly owned subsidiary of Newport Group, Inc.