2025 Trends in Executive Benefits: NQDCPs Key to Retention Amid Economic Uncertainty

The 2025 NFP U.S. Executive Compensation and Benefits Trend Report highlights how companies are realigning their executive benefits strategies in response to economic uncertainty and demographic shifts. With many baby boomers nearing retirement, organizations face leadership gaps and are prioritizing talent retention through customized compensation plans and succession planning. Economic concerns have prompted a move towards more sustainable and financially disciplined executive benefits rather than the previously generous post-pandemic packages.

The report also reveals that while many executives are delaying retirement, a significant portion does not fully understand their benefits, impacting engagement and retirement readiness. Employers are encouraged to improve benefits communication and financial literacy to enhance the value and effectiveness of compensation programs.

Nonqualified deferred compensation plans (NQDCPs) are identified as critical tools for executive retention and financial planning. These plans offer employers a cost-effective design and provide executives with tax-advantaged flexibility, making them increasingly attractive amid inflation and tax rate uncertainties. The majority of plan participants report satisfaction with these plans' impact on their retirement preparedness.

NFP's report is based on data from a survey of 260 executive benefits decision-makers and underscores the need for businesses to balance retention priorities with financial prudence. It encourages employers to leverage clear communication and onboarding strategies to maximize participation and gain a competitive edge. The findings are valuable for insurers, benefits consultants, and HR leaders focused on executive compensation.