This program is a NQDC program, so there is no "tax" number for it. It's non-qualified according to the federal tax code because there is a "risk of loss" as the money is allocated out there, I can see the matches and interest, but in the event that the company goes bankrupt the money is not protected in a trust...I'm a creditor like everyone else. Risk of bankruptcy is minimal, but because it is non-qualified I can't roll it when I leave.
My read on is that I'm being moved to the NQDC program based on top heavy testing. The compensation situation is evaluated on an annual basis, so if my compensation is lower this year than last then I could be allowed back into the 401(k) next year. Really annoying. I have 30 days to decided if I will participate in the NQDC program and then I'm not eligible to make any elections until next year.
I'm thinking my best move is to do 6% in order to get the match, select lump sum payout for when/if I leave the company, and then take the difference between my now 17% contribution and the 6% and put it into a straight investment account.
Assuming decent investment options within the NQDC (I've never been invited despite having a single digit 401k contribution rate to max out, so I don't know exactly how it works), I'd put as much into the NQDC you could if the risk of your company going under is minimal. Any other risk you'd be taking on? Reasoning is the money will grow tax deferred while in the NQDC and then you'll be hit with taxes when a trigger event occurs. Tax deferred growth is always better than taxable growth, ceteris paribus.
"If you only have 1 year to live, move to Penn...as it will seem like an eternity."
Good to see you back, I was starting to miss your incisive commentary!