Non-Qualified Plan

Does NOT meet federal requirements → no favorable tax treatment: contributions are not deductible and the employer may legally discriminate in favor of key employees, directors, and officers. May be funded (assets held in trust/escrow) or unfunded (employee relies on the employer's unsecured promise). Examples: deferred compensation, SERPs, incentive plans.

A man deposits $150/month into a savings account 'for retirement' — good intentions don't qualify a plan; deposits and interest stay taxable every year.