Nonqualified Deferred Compensation Plan (DCP aka 409A) Participant User’s Guide

MBS Principal John Sanford and Consultant Nicko Burnett have co-authored an article to address the lack of public information on how a participant can effectively and efficiently utilize a DCP to help improve their financial outlook: a true user’s guide. That article, Nonqualified Deferred Compensation Plans (DCP aka 409A): A Participant User’s Guide, is published in the Fall 2021 edition of The Journal of Deferred Compensation: Nonqualified Plans and Executive Compensation, a peer reviewed journal focusing on nonqualified plans and Section 409A of the tax code (article available here).


DCPs have long been seen as an exceptional and necessary benefit to offer key employees of companies large and small.  According to the latest PSCA Survey, over 90% of companies surveyed (private and public) have at least one DCP.  Internet searches turn up articles about how DCPs work and why company should offer one; missing from that library is any help for a participant in a plan.


With that in mind, the Participant User’s Guide answers the most common questions asked by participants:

  • Should I participate?
  • Does short term deferral work?
  • When should my distributions occur?
  • How should I invest my balance?
  • Should I use the DCP to save for my children’s college education, a second home, or retirement?
  • What if my goals change?
  • What happens if my company gets sold or goes bankrupt?


If your plan doesn’t allow for some of the flexible plan features compliant with 409A regulations that can be beneficial to participants and plan sponsors, please contact your Mullin Barens Sanford Financial Consultant via this link.


About Mullin Barens Sanford Financial

Through a powerful combination of independence and experience, Mullin Barens Sanford Financial and Insurance Services (MBS Financial) is a leading consulting firm that assists companies with 409A and other executive benefit needs.

Disclaimer: The materials are designed to convey accurate and authoritative information concerning the subject matter covered. However, they are provided with the understanding that Mullin Barens Sanford does not engage in the practice of law, or give tax, legal or accounting advice. For advice in these areas please consult your appropriate advisors.

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