A majority of U.S. employers are using non-qualified deferred compensation plans for executive retention (68 per cent) and to support broader financial planning goals such as remaining competitive with peers (53 per cent) and helping participants save for retirement (52 per cent), according to a new survey by NFP Corp.
The survey, which polled more than 250 employers, found nearly nine in ten (87 per cent) said plan members are satisfied with the impact of deferred compensation plans on their retirement preparedness.
While many baby boomers are leaving the workforce, other key contributors are delaying their retirement, with nearly three in five executives (57 per cent) working longer than they originally planned.
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However, this extended tenure doesn’t always mean better retirement preparation. The survey revealed a persistent gap between this cohort’s interest in retirement and the support they receive from their employers in planning for it.
The economic environment is also forcing employers to rebalance their approach toward customized executive compensation solutions that balance employee expectations with business health. One in five employers said concerns about economic uncertainty will lead them to alter the amount or type of executive benefits they offer.
“Most employers recognize that they cannot afford to lose top talent,” said Tony Greene, president of NFP’s executive benefits division, in a press release.
“Baby boomers are exiting the workforce, which is driving employers to focus more on their future leaders and creating an opportunity to invest in retention strategies and leadership development programs that will help establish executive pipeline channels for generation X, millennials and even younger employees. Talent and succession planning have become a business continuity issue.”
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