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Can a for-profit company establish a DROP plan?


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Guest skim3011
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I've always seen DROP plans associated with governmental entities. Is it possible for a company to establish such a plan?

Posted

It would be very difficult, if not impossible, for a private corporation to adopt a DROP plan. Such an employer would have to work around the ERISA restrictions on back-loading of benefits. It would also have to make sure that the plan, as a whole, did not discriminate in favor of highly compensated employees. I have not seen one that has found a way around these constraints.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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