PRIVATE PROTECTION PROGRAMs
Private protection programs are offered by organizations but are not required by law. They include retirement income plans, capital accumulation plans, savings and thrift plans, and supplemental unemployment benefits and guaranteed pay. Some firms also offer work options for retirees, including temporary full-time and permanent part-time employment.
The various retirement income plans can be classified in terms of whether they are qualified or nonqualified. A qualified plan covers a broad, nondiscriminatory class of employees, meets Internal Revenue Code requirements, and consequently is qualified to receive favorable tax treatment. For example, the employer's contributions to the plan are tax deductible for the current year and employees pay no taxes until retirement.
Nonqualified plans do not adhere to the strict tax regulations, cover only select groups of employees, and consequently do not receive favorable tax treatment.