What is a qualified plan? A qualified plan is simply a plan described in Section 401(a) of the Tax Code. Qualified plans are retirement plans recognized by the Internal Revenue Service in which investment funds grow tax-deferred. Defined-benefit and defined-contribution plans are the two most popular categories of qualified plans.
Non-qualified plans are types of retirement savings plans that do not adhere to the Employee Retirement Income Security Act (ERISA) guidelines. Generally, non-qualified plans are utilized to give highly-paid executives additional options for retirement savings.