What are the risks of participating in an NQDP?
Unlike a qualified 401(k) plan, your NQDP account balance is subject to the claims of your employer’s general creditors should the company lose solvency. The security of your benefits under the plan is therefore dependent on the continuing financial strength of your employer. If these balances were protected from these claims, then plan participants would no longer be able to enjoy the deferral of current income tax on these balances.
