Top Hat Statement

[Randy Watson]

Assume an entity purchases the assets of another and a number of employees come over to work for the purchaser. One of those employee's is actually hired as a consultant. As part of the asset deal, the purchaser agreed to assume the liability for paying that consultant's NQDC benefit. A new benefit agreement was entered into between the purchaser and the consultant where the purchaser agrees to pay the consultant a monthly benefit equal to that which he was entitled under the prior employer.

Since this individual was an independent contractor and never an employee of the purchaser, is this arrangement covered by ERISA? The time to file a top hat statement has passed and I'm trying to figure out whether I need to correct this or let it go.

[Steelerfan]

I always thought ERISA generally only applied to employees of employers as determined by the common law test. I'd think you have nothing to worry about unless the govermment has an argument to reclassify the consultant as an employee.

[JanetM]

I agree with stellerfan- not covered by ERISA. You just have long term contract to continue paying this fella. Call it a retainer if you wish.