Audit of a non qualified plan?

[SteveH]

I'm not an auditor, I'm not involved in retirement plan audits, but I have had someone looking to me for guidance ask a question that I can't answer.

This non qual has over 100 participants and is not in a Rabbi trust, but instead part of a secular trust. The plan is meant to operate very simialr to the company's 401(k) plan. The provisions are very similar. The questions is are we going down a path where ERISA has some hooks into this type of plan? A respected person my little world has said that they should file a 5500 and be audited. That sounds crazy to me.

I don't know all of the details, but imagine a 401(k) plan that excludes HCE because of ADP issues. Then imagine a non qualified plan that is put in place for these HCE that operates basically the same as the 401(k).

Any thoughts?

[J Simmons]

ERISA Title I would apply to the nonqual plan you describe, unless excluded because of the type of employer (e.g., local governmental entity). Just because it does not qualify for tax advantages (an IRS issue under Title II) doesn't mean that the nonqual plan isn't involving the deferral of compensation promised by employer to the HCEs (a DoL issue under Title I).

If the nonqual plan meets the definition of a top hat plan, certain disclosure and reporting requirements might be avoided or allowed to be satisfied in a very short-shrift manner. I suspect others on this Board will chime in with more info that can be of help to you.

[k man]

in order to qualify for the top hat exemption plan must be for select group of management or highly compensated employees.