A type of trust between an employee and an employer in which the employer makes contributions to an irrevocable trust. Upon the occurrence of a stipulated event (e.g., death, disability of the employee, or retirement), the trustee will make payments to the employee or his beneficiary. In order for the contributions to be tax deductible to the employer, funds from the trust must be distributed to the employee.
a trust arrangement in which deferred compensation plan assets are placed in an irrevocable trust out of the reach of the employer or any of the employer's successors, but are still subject to attachment by the general creditors of the employer
a "grantor" trust, and as such is treated as an asset of the employer
an employer grantor trust, meaning that the employer will recognize the trust's income and expenses, including benefit payments
an irrevocable trust established to pay promised benefits
an irrevocable trust used to fund deferred compensation benefits for key employees
a nonqualified deferred compensation plan whereby an employer and employee agree to defer payment for the employee's services until a specified future date
a trust set up to hold property used for financing a deferred compensation plan, where the funds set aside are subject to the employer's creditors
a type of grantor trust used to hold assets for nonqualified executive benefit plans
A trust, owned by the company, that holds assets to help meet non-qualified benefit payments. Rabbi trusts are taxable trusts, and trust assets must be available to corporate creditors in the event of a bankruptcy.
An irrevocable trust into which an employer contributes money to fund a deferred compensation obligation. The employer cannot access these funds, but the general creditors of the employer can do so.
A rabbi trust is an irrevocable trust used to accumulate assets to support deferred compensation arrangements and designed to overcome the concern that a change in company management could place the promised deferred compensation plan benefits in jeopardy. A rabbi trust, however, contains a provision that the trust assets would always be available to the employer's general creditors in the event of bankruptcy. As a result of that provision, the IRS has held that, in the case of a deferred compensation plan whose benefits are secured by a rabbi trust, the participant would have no current taxable income.
A trust created for the purpose of supporting the non-qualified benefit obligations of employers to their employees.
An irrevocable trust for a deferred compensation plan, like an escrow account, created by the employer to protect a highly compensated employee's deferral from change of control or change of compensation strategy - but not, however, from bankruptcy.
A Rabbi trust is a type of trust used in non-qualified deferred compensation plans in the United States where current income of an employee is deferred but not taxable to the employee. The employer however sets aside the assets in a separate trust for the employee's future. Ordinarily, this would cause current inclusion into gross income even though the employer has yet to reduce the money to income because of the economic benefit theory doctrine.