There are two broad types of retirement arrangements that an employer may provide: qualified retirement plans and nonqualified deferred compensation plans or arrangements. A qualified retirement plan is a plan that meets requirements set forth in the Internal Revenue Code of 1986. Qualified plans are also subject to regulation under ERISA.

In contrast to qualified plans, nonqualified plans are subject to relatively few restrictions under the Internal Revenue Code. In addition, if a nonqualified plan is limited to a select group of management or highly compensated employees, it is generally not subject to ERISA.