Deferred Comp - Incentive Bonus
The Principal® Deferred Comp - Incentive Bonus plan is a deferred compensation plan that allows employers to make discretionary company contributions to participants, while helping meet organizational goals. It provides companies a long-term incentive plan that can help retain and reward select Top Hat and non-Top Hat employees.
View Employer Summary (BB10209) to review the benefits and considerations of this plan for plan sponsors and participants.
Target employers that display most of the following attributes:
- Business entity (public/private C corporations are best, pass through entities for non-owners also an option)
- Good business continuity
- Good financial situation (profitable, good cash flow)
- Corporate objectives include retaining and rewarding both Top Hat and non-Top Hat employees
- Financial ability to make employer contributions to the plan
For Plan Participants
- Participants have the ability to further defer the receipt and taxation of plan benefits, as allowed by plan design
- Eligibility of Top Hat and non-Top Hat employees to participate in the plan
- Ability to design an individualized investment strategy.
For Plan Sponsors
- The company can make discretionary incentive contributions to recruit, retain and reward selected key employees.
- Assets accumulated to finance the plan remain an asset on the company’s balance sheet.
- Flexible plan design and multiple financing options available.
- The company can set vesting schedules that meet corporate objectives.
- The plan is simple to administer and requires no discrimination testing, minimum participation or Form 5500 filing, if set up properly.
Deferred compensation plans are unfunded contractual obligations to pay benefits to a plan participant in the future. The employer can choose to informally finance the future obligation or leave the obligation unfinanced. The best financing method is dependent on the employer’s financial characteristics and the degree of risk that is acceptable to plan participants and the employer.
Financing and Investment Capabilities Brochure (BB9784)
Demonstrates the ability of Principal to help clients simplify the financing and investment aspects of their deferred compensation plans.
View (PDF) • Order
For more information: Corporate Owned Life Insurance (COLI) • Taxable Investments
For those employers choosing to informally finance the plan, most offer a range of investment options and allow their plan participants to choose reference investments among multiple fund families and money managers. This allows plan participants to choose reference investments that fit their specific objectives and risk tolerances.
Investor Profile Quiz (BB9671)
Give this to plan participants to help them determine the reference investments right for their risk tolerance. Order a printed version, or use the "fillable form" PDF by selecting View.
Principal LifeTime Portfolios Brochure (PQ3483)
Shows how the Principal LifeTime Portfolios can take care of asset allocation and diversification decisions.
Consumer Approach Email (LF356)
Tells employers how an Incentive Bonus plan can help keep their top talent motivated ad loyal for the long term.
View (OFT)
Note: For emails, you are responsible for complying with all CAN-SPAM legislation and maintaining your own opt-out database. Using these emails constitutes your agreement to follow our terms of use (BB10937).
Key materials listed below.
Before the Sale
Deferred Compensation Capabilities Brochure (BB9406)
Present the comprehensive plan-level experience and administrative plan services that Principal® provides for its deferred compensation plan employer clients.
View (PDF) • Order
Nonqualified Deferred Compensation Leadership Flyer (BB9750)
Demonstrate the deferred comp capabilities of Principal with leadership and financial strength statistics.
View (PDF) • Order
Employer Summary (BB10209)
A one-page plan overview that outlines plan benefits and considerations.
View (PDF) • Order
Business Opener (BB10948C) & Opener PowerPoint (BB10870)
This marketing piece is designed to introduce companies to the Deferred Comp - Incentive Bonus plan. Customize the front cover. To create a customized electronic file, select “View” below.
View Sample (PDF) • Order • View Presentation (PPT)
During the Sale
Engagement Agreement (BB10291)
Once the client is ready to use our in-depth plan design consulting, complete this agreement and return with engagement fee.
View (DOC)
After the Sale
Services Summary Flyer (NQ23)
Use this tool to show a high-level overview of the comprehensive plan administrative services that Principal provides employers.
View (PDF)
Deferred Comp Implementation & Enrollment
Access materials for use in the plan implementation process, including business submission guidelines, participant materials and sample agreements.
Go to NQ Deferred Comp New Business Enrollment
Key materials listed below.
Advanced Markets Information
Technical material for applied knowledge on a specific topic.
View Advanced Markets Information
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