The Dangers of Deferred Comp Plans

In the New York Times, "Your Money" reporter Ron Lieber puts forth this hypothetical:

"Here’s a nightmare for you: Imagine waking up one morning to discover that your employer is bankrupt and the money you have set aside in your deferred compensation plan belongs to the company’s creditors."

If you are a financial advisor at, say, Merril Lynch or Smith Barney, this was a nightmare alright, one you lived. Indeed, you might regret having participated in your deferred comp plans --- which featured company stock. You might forward this article to clients, but without mentioning your own real-life nightmare.