The number of companies offering key executives voluntary nonqualified deferred compensation plans remained constant from 2007 to 2008, and just about half of the eligible employees took advantage of the benefit, according to a new study.

The consistency in NQDCP use indicates that providing talented executives with attractive financial benefits is as relevant in a booming economy as in times of market woe, according to the 2008MullinTBG/PLANSPONSOR Survey, which found that more than 90% of public and private U.S. companies continue to offer this type of executive benefit.

Large companies, smaller companies, as well as publicly traded and privately held companies each offer the plans at the same rate as last year, according to the third annual survey.

NQDCPs are executive benefit programs in which participants defer income in exchange for an unsecured promise from the company to pay future benefits. Tax-deferred savings of this nature are subject to creditors in the event of bankruptcy, which make NQDCPs especially effective at giving top talent a personal vested interest in a company’s financial success, according to a statement announcing the study results.

“NQDCPs are an essential part of an organization’s overall business strategy, no matter what the current state of the economy,” said Mike Shute, chief executive officer of MullinTBG, a Prudential company that designs, funds and administers NQDCPs, in a statement. “Properly structured, they serve as one of the most cost-effective ways for a company to drive positive results by closely aligning executives’ performance incentives with corporate objectives.”

NQDCPs serve as an effective retention tool, making up for qualified plan restrictions, and rewarding outstanding performance that contributes to companies’ and executives’ bottom lines, according to MullinTBG. With traditional pensions and defined benefit plans becoming less common, the appeal of company-sponsored savings vehicles that offer enhanced deferral opportunities remains strong and steady.

Given the significant downturn in America’s economy, this year’s survey results reflected both plan sponsors’ and executives’ concerns over company performance and viability, as well as the effects of belt-tightening measures across the board, the survey’s authors said.

The survey found that plan participation stood steady at just above 50% of all eligible employees. A lack of discretionary income or an unwillingness to take risks with their deemed investments in a volatile stock market were most frequent reasons not to offer the plans, according to survey respondents.

More companies used an investment or crediting rate tied to an outside index or fixed rate (20.4% in 2007 vs. 26.5% in 2008).

Nearly 26% of companies reduced or eliminated defined benefit pensions and cash balance plans, representing a steady year-over-year decline in these types of arrangements, according to the survey.

Informal funding remains a popular strategy for financing NQDCP liabilities, as utilized by 61.2% of companies, though these results reflect larger companies having increased their usage of mutual funds and corporate owned life insurance (COLI), while smaller companies scaled back on those funding mechanisms in favor of bolstering their cash position.

The MullinTBG/PLANSPONSOR survey used responses from 432 companies within a wide range of industry profiles. Of the respondents, 58% were publicly traded, 90% were tax-paying entities and 57% had revenues in excess of $1 billion.