Question: 1 / 400
What is the characteristic of a non-qualified plan?
It is employer-sponsored with formula-based benefits
It is for the exclusive benefit of employees
It promises future benefits for currently performed services
A non-qualified plan is characterized by promising future benefits for currently performed services. Unlike qualified plans, which must meet specific requirements set by the Internal Revenue Code (Option D), non-qualified plans do not have the same regulatory restrictions. Option A is incorrect because formula-based benefits can be found in both qualified and non-qualified plans. Option B is incorrect because non-qualified plans may not necessarily be for the exclusive benefit of employees.
Get further explanation with Examzify DeepDiveBetaIt is subject to Internal Revenue Code requirements