Nonqualified Deferred-compensation Plan

Nonqualified Deferred-compensation Plan means:
a deferred-compensation plan established to defer income beyond an employee's peak income years. The tax treatment of such a plan depends on whether the plan is funded or unfunded and whether it is forfeitable or nonforfeitable. If it is unfunded, the employee is taxed later, when the compensation is actually paid. An escrow account may be used to accumulate the deferred payments for the employee. See Rabbi trust; secular trust; restricted property.