Risks

Participation has several possible risks:

Market fluctuations
If you choose an investment option that declines in value, the amount paid at distribution might be lower than if the compensation had not been deferred.

Bankruptcy
The Deferred Compensation Plan is a "nonqualified" plan under the Internal Revenue Code and IRS regulations. Nonqualified plans do not offer the protections of ERISA and must comply with certain rules in order to maintain their status as nonqualified plans. If not, all previously deferred compensation may be immediately taxable to you.

One of these requirements is that the plan assets must continue to remain assets of Komatsu. Your deferred compensation is held in a special trust solely for the benefit of the employees participating in this plan. But because the trust is part of Komatsu's assets, the trust would be subject to the claims of creditors if Komatsu were to declare bankruptcy.