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Morgan Stanley Smith Barney offers both turnkey and custom-designed programs tailored to help
meet your client's unique corporate needs. Some of the plan design
elements that generally are considered are:
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Eligibility
Nonqualified deferred compensation plans are generally limited to a "select group of management or highly compensated employees." In practice, the group of eligible executives is determined by level of compensation or title.
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Elective Deferrals
A nonqualified deferred compensation plan can allow executives to defer any portion of their compensation including salary, bonus, commissions and other forms of compensation.
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Other Contributions
A nonqualified deferred compensation plan can also entail an employer contribution. Employer contributions and related vesting schedules can be used to provide key-employee-specific incentives or rewards, which can be tied to performance, tenure or other corporate objectives.
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Benefit Accounts
Typically, each executive's deferrals and any company contributions are reflected in an individual account. This account also shows earnings based on the plan's "crediting" rate or benchmark investment funds.
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Crediting Rates/Benchmark Investment Funds
This rate can be based on a fixed interest rate or other index
(e.g., Treasury Notes, Prime Rate and LIBOR). As an alternative,
the plan can allow for the executive to "invest" his account balance
among a hypothetical menu of benchmark funds, which can be custom-fitted
to corporate needs or even replicate the options offered in the
qualified retirement savings plan.*
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Distribution Options
A nonqualified deferred compensation plan requires the executive to elect the timing and form of his distributions. There is substantially more flexibility inherent in nonqualified plans than in qualified plans.
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| * Investors should consider the Fund’s investment
objectives, risks, charges and expenses carefully before investing.
The prospectus contains this and other information about the fund.
To obtain a free prospectus, please call your financial professional.
Please read the prospectus carefully before investing.
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