NQDC's retention case has a comprehension problem

The retention case for nonqualified deferred compensation now arrives with a number attached: 80% of sponsors call the plans critical for attracting and retaining executives, and 79% rank talent attraction and retention as the benefit's highest value. Yet nearly half of employers say potential participants remain unclear on what that value is.

Nearly 90% go further, saying the plans are equally vital in helping executives meet their own retirement planning needs, and Newport president Mike Dunn frames the exercise as a business investment rather than a perk, saying, "Employers are looking beyond salary, bonus and equity when competing for executive talent. Our survey shows that organizations increasingly view executive financial confidence as a business investment."

The employers who say potential participants remain unclear on the value of NQDC benefits—nearly half of those surveyed—blame weak communications and thin financial planning support. A benefit that nearly half its intended audience cannot put a value on is not yet delivering the retention sponsors say they are buying, which makes comprehension a statement problem before it becomes a design problem. The cheaper fix is the better one: a plan year spent on how the deferral is explained to executives will return more retention per dollar than another feature added to the election form.

Tax efficiency comes second, named by nearly 60% of employers as an equally important objective, a figure that tracks the states that have proposed or enacted additional taxes on high-income earners. The report also cites modern plan design and a more specialized platform as answers to irrevocable-election-rule challenges, which it treats as a barrier to adoption.

About 90% of employers see value in specialized, dedicated NQDC expertise, and nearly a third have changed providers recently, listing costs, services or the service team itself. Those three complaints arrive as one answer, and in NQDC the team is the product, so a switching rate that high reads as a labor-market fact about the people running these plans rather than a fee story—sponsors shopping the market on price are bidding for a commodity their own survey says they do not want.

The report lands with new owners behind it: Stone Point and Genstar took equal stakes in Ascensus in August, funding a technology and AI push, as this publication reported at the time, and we've argued that the retirement-plan consolidation wave is now a race for capability beyond core recordkeeping—participant wealth, advisory, executive benefits. NQDC fits that race and complicates it, because the survey's respondents name a dedicated service team as the differentiator, and no platform roadmap manufactures one on schedule. Watch the comprehension figure when the next edition lands. If it holds near half, the retention case is still one sponsors are making on their executives' behalf.