Limitations of NQDCs
NQDCs can be a valuable savings vehicle for highly compensated workers who’ve exhausted their other savings options, but they're not risk-free. They’re not protected by the Employee Retirement Income Security Act (ERISA) like 401(k)s and 403(b)s are. If the company holding an employee’s NQDC declared bankruptcy or was sued, the employee’s assets would not be protected from the company’s creditors.
