What Is A Non-Qualified Retirement Plan? 
Non-qualified retirement plans are not sanctioned for the tax deduction like qualified plans are under ERISA . Non-qualified retirement plans generally use annuities and life insurance . Annuities can be used in qualified plans , but life insurance can not . Non-qualified and qualified retirement plans using annuities , for an example , accumulate tax deferred , but the basis of a non-qualified annuity is distributed free of taxation , whereas qualified annuities are fully taxable including basis . 