Has anyone seen a NQ Deferral plan that allows for the deferral on unused vacation? Any thoughts or comments on this would be appreciated.

I have not seen vacation pay covered in non-qualified deferred comp plans. After giving this some thought, I think you would have to look at it state by state, due to the labor laws of each state. Many companies have a "use it or lose it" approach. Finally, vacation pay doesn't seem to represent a large amount of money, in most cases, so why not focus on defering other income, since there are no limits.

John,

In a sense, unused vacation pay is deferred compensation. In a state such as California, where it cannot be lost once earned, it is essentially deferred compensation without any earnings. In a state such as Georgia, where vacation can be lost if not used by a certain date, allowing for the vacation pay to go into a deferred compensation plan would seem to take away the employers ability to force the use of the vacation by a certain date. Under either scenario, the company is greatly increasing the value of the vacation pay. This might be a tough sell in a public company. But I see no tax problems involved, in fact, the idea is already used by many companies with their 401(k) plans.