The Nationwide® Corporate Incentive Program (TNCIP)
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Simplify your deferred compensation offerings with a highly flexible, turnkey solution, using Corporate Owned Life Insurance (COLI) as a financing vehicle. The Nationwide® Corporate Incentive Program (TNCIP) is a turnkey non-qualified deferred compensation solution designed to mirror a 401(k) plan for highly compensated employees.

  • Provides a way for key employees to defer current income taxes on an unlimited amount of their compensation
  • Increases compensation through employer matching contributions
  • May be less expensive to set up and administer than a qualified plan
  • Reduces paperwork – no significant filing or reporting requirements

TNCIP Features

Description

A turnkey non-qualified deferred compensation solution designed to mirror a 401(k) plan that permits highly compensated employees to defer up to 100% of their compensation to a future date, reducing their current tax obligations.

Comprehensive approach

  • All required documents included
  • Web-based plan enrollment and administration
  • Optional rabbi trust services
  • Properly matched plan financing choices

Sponsor’s financing vehicle

Corporate Owned Life Insurance (COLI)
  • Aggregate financing techniques used to minimize underwriting requirements
  • Tax-deferred growth to plan sponsor on accumulated value
  • Death benefits received income tax free
  • Flexibility in selecting sub-accounts from leading fund houses

Benefit flexibility

  • Can change deferral elections annually
  • Can elect specific distribution dates to meet future obligations
  • Can receive retirement distributions in one sum or installments
  • Can make matching employer contributions (with or without vesting)

Eligibility

  • Employer decides who will be allowed to participate
  • Can discriminate to highly compensated or key employees

Administration

  • Quarterly participant account statements provided to Plan Sponsor
  • Monthly trust statements provided to Plan Sponsor

Frequently Asked Questions About TNCIP

What types of employers are best suited to adopt TNCIP?

Typically, C Corporations that are in no danger of becoming insolvent or bankrupt in the foreseeable future are the most ideal candidates.

What is deferred compensation?

Deferred compensation is an agreement between an employer and their employees to pay compensation at some date in the future. Compensation may include salary, bonus and commissions.

What does “non-qualified status” mean?

Non-qualified generally means that the plan is not a tax-qualified plan under Section 401(a) of the Internal Revenue Code, which sets standards for qualified plans like profit-sharing, money purchase and 401(k). Non-qualified plans are not subject to the tax law requirements on contribution limitations and discrimination with respect to eligibility and vesting. The plan’s non-qualified status also alleviates the need to submit IRS Form 5500 reports to the IRS. The only federal filing required is a letter to the Department of Labor (within 120 days of plan adoption) that states that a non-qualified plan has been adopted.

What is a rabbi trust?

A rabbi trust is a vehicle that allows company assets to be placed in an irrevocable trust, titled in the company’s name. Since this trust is titled in the company’s name the assets are subject to the general creditors of the company. The trust is essentially earmarked for the benefit of the participants, but not held for their exclusive benefit.

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For more information call 1.866.4ML-BUSINESS (465-2874) or e-mail us at AskMLBiz@ml.com.

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