NQDC Plan (Sr. Directors & above)

The VMware Non-Qualified Deferred Compensation (NQDC) Plan provides an opportunity for those at Sr. Director (or equivalent) level and above to manage taxable income and defer portions of compensation until a future date.

Eligibility

The NQDC Plan is limited to VMware employees at Senior Director (or equivalent) level and above. Eligible employees will receive direct communication on your eligibility ahead of each annual open enrollment period.

Enrolling in the NQDC Plan

Eligible employees can enroll in the NQDC Plan during the annual open enrollment period, typically held in early December each year. Elections are made through Fidelity NetBenefits. Generally, once enrolled, you are not permitted to make changes until the next annual enrollment period.

Deferrals

Eligible employees can elect to defer from the below compensation sources:
– Base Salary: 5% to 75%
– Commission: 5% to 100%
– Annual Bonus: 5% to 100%

Note: Deferrals are made to the NQDC Plan before contributions are made to the 401(k) Plan and are not considered 401(k) eligible compensation. Be aware that lowering your 401(k) eligible compensation could impact your ability to maximize your contributions and VMware’s matching contributions to your 401(k) Plan.

Distributions

During each enrollment period, you will select the distribution timing and payment method for the upcoming plan year deferrals. This gives you the flexibility to customize timing of distributions to fit your financial planning.

Distributions

Distribution Timing Forms of Distribution
Earlier of either:

  • Separation
  • A fixed date in the future (at least 3+ years after monies are deferred)
Either as:

  • Lump sum
  • Annual installments over 5, 11, 0r 15 years

Generally, distributions are processed by Fidelity on the first business day of each calendar quarter: January, April, July, and October. Separation from service distributions will override a later fixed date distribution election. Distributions due to separation will be paid at the beginning of the first calendar quarter that is at least six months after your separation date.

Investment Options

The NQDC Plan offers 30+ choices of funds, ranging from money market accounts and bond funds to growth stock funds. To manage your investments, log on to the Fidelity website. Because the NQDC is a “non-qualified” plan, where your deferrals are not really invested in your specific account, your investment options are considered to be “notional” as they’re for accounting purposes only. The value of your deferred compensation account is based on the performance of the investment options you select.

Naming a Beneficiary

When you enroll in the plan, you must name a beneficiary to receive your plan account balance in the event of your death. You can update your beneficiary at any time on the Fidelity NetBenefits website.

For full NQDC Plan details, a compare of the NQDC to the 401(k) Plan and comprehensive examples, please refer to the Non-Qualified Deferred Compensation Guide.

Contact Us

Contact HR Source [VMware network access required]
ASK HR [VMware network access required]
Phone: 1-888-869-2738


Fidelity Investments
Phone: 1-800-835-5095
Visit Website

Resources

NQDC Guide and FAQs


NQDC Plan Overview Webinar

Last Updated: 24 Nov 2021, 7:21 PM