Rabbi Trust

[fidu]

Happy Holidays to all. little help please . . .is a Rabbi Trust a DB or a DC type plan, and why?

[Guest Maple1]

A rabbi trust is not a plan, it is a type of trust used for nonqualified plans to provide some security (change of control, change of heart) for executives and to accumulate funds to pay benefits. Rabbi trusts can be used for both DB and DC plans.

My company designs Nonqualfied plans if you need more information.

[Guest Tom Geer]

Rabbi trusts are basically a way of holding the hands of the participants. In bankruptcy, the assets go to the bankruptcy trustee. They can help in a takeover context, particularly when combined with appropriate change of control provisions. One possible COC provision is a "springing" secular trust, which cuts off employer rights in a COC.

My firm also designs nonqualified plans and the various funding options.

[Guest FPlanner]

Mr. Geer - Is it my understanding from your post that the "springing" secular trust provides security from insolvancy but does it protect from immediate taxation since it is a provision within the rabbi?

Originally posted by Tom Geer

Rabbi trusts are basically a way of holding the hands of the participants. In bankruptcy, the assets go to the bankruptcy trustee. They can help in a takeover context, particularly when combined with appropriate change of control provisions. One possible COC provision is a "springing" secular trust, which cuts off employer rights in a COC.

My firm also designs nonqualified plans and the various funding options.

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