There is a dramatic trend to restore benefits lost from traditional, IRS qualified retirement programs by using non-qualified deferred compensation plans. An increasing number of executives are affected by ERISA and IRS limitations including maximum compensation limits and 401(k) savings plan contribution and nondiscrimination restrictions. In addition, with the continuing rising costs of defined benefit pension plans, more and more employers are reducing benefits, freezing future accruals or terminating these plans.

As a result of this trend, the majority of executive retirement benefits may be paid from non-qualified benefit plans. Already the growing use of non-qualified executive plans is evident. According to the Bank Executive Survey, only 30% of CEO's gave a top rating in the survey to the question "How well is your board of directors managing its executive compensation program? While over 73% stated their biggest compensation challenge for the future is developing a program to tie compensation to performance.