Transfer of SERP Assets and Obligations

[Guest rcenek]

Opinions on whether the assets and obligations of a subsidiary's SERP (for employees and non-employee directors) can be transfered to the purchaser of the parent - with the subsidiary remaining as a sole remaining entity?? Seems like there could be potential issues/questions re. constructive receipt, and whether the assets need to be subject to forfeiture by creditors of your employer?? In this case, some individuals would not be employees of the purchaser of the parent.

[IRC401]

NQDC plans don't have any assets.

Someone needs to look at all of the contractual provisions.

[Guest rcenek]

Thank you for your reply. There are assets for our SERP - and they are placed in an irrevocable trust. Life insurance policies with a cash surrender value that can be seized by creditors so any bankruptcy court would consider them assets. No contractual clues.

[Guest EAKarno]

I think IRC 401's point was that there are no "plan" assets per se. The assets you are referring to are actually company assets notwithstanding the rabbi trust.

If you are talking about transferring the trust and its associated obligations to a company other than an employer of certain SERP participants, you would seem to have constructive receipt issues with respect to such participants. It's not simply the assets that will create the problem, however, it's the rabbi trust's obligation to pay unaffiliated employees from assets outside the reach of their employer's creditors.

[Guest rcenek]

Thank you! We received a similar opinion from an ERISA attorney.