DRESHER, PA — Employers are increasingly positioning nonqualified deferred compensation plans as both an executive retention tool and a financial-planning benefit, while 84% expect artificial intelligence to improve decisions about how much participants defer, according to a 2026 survey released by Ascensus.
The fourth biennial Newport/PLANSPONSOR NQDC Plan Trends Survey collected responses from 203 employers across more than 45 industries. Newport is an Ascensus company.
Talent competition remains the primary reason employers offer the plans, which allow eligible employees to defer compensation for payment at a later date. Seventy-nine percent of respondents identified attracting and retaining executives as a top reason for providing an NQDC plan.
More than 80% of plan sponsors said NQDC plans are effective in attracting and retaining executive talent, while 88% said the plans support executives’ long-term financial planning and retirement preparedness.
The findings also point to growing employer interest in using AI to help participants navigate financial decisions. Eighty-four percent of sponsors said AI could improve deferral decision modeling, while 79% identified potential benefits for distribution modeling and participant communications.
Participant understanding remains a constraint. Forty-six percent of employers identified it as the leading barrier to participation, putting greater emphasis on education and financial-planning support as employers seek to increase use of the plans.
“Employers are looking beyond salary, bonus, and equity when competing for executive talent,” Newport President Mike Dunn said. He said companies increasingly view financial planning support as part of their recruitment and retention strategies.
The survey included an example in which an employer competing for a senior-level hire used an NQDC plan with a matching contribution and vesting schedule as part of the benefits package that helped secure the candidate after salary, bonus and equity had advanced the company to the final stage of the recruitment process.
Employers also placed a premium on specialized plan administration. More than 90% said they value providers with dedicated NQDC expertise, while 77% reported that participants were satisfied with the plans’ effect on their retirement and broader financial-planning preparedness.
Corporate-owned life insurance also gained ground as a method for informally funding NQDC obligations. Nearly half of sponsors reported using COLI as their primary financing vehicle, up from about 40% in the 2024 survey.
The survey, first launched by Newport in 2012 and conducted biennially with PLANSPONSOR since 2020, examines employer priorities, plan effectiveness, participant engagement, technology and other trends affecting executive benefits.
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