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With the inflationary economy on almost everyone’s mind, Fulcrum Partners has issued a revised report on the use of Rabbi Trusts during times of economic unpredictability.
Rabbi Trusts in an Inflationary Economy
Last week, Former Federal Reserve Chairman Ben Bernanke, in a discussion at the Brookings Institution, said that he thinks, “the Fed will bring inflation down over the next couple of years[i].” On the same day, Bloomberg News reported on comments from Columbia University professor and Nobel laureate, Joe Stiglitz, at the World Economic Forum. Stiglitz stated, “Raising interest rates is not going to solve the problem of inflation[ii].”
Find out which 2 primary events allow for the termination of a nonqualified plan.
How long inflation continues, how high it goes, and what factors ultimately turn it around are up for speculation and educated guessing. But how companies manage their resources, including their workforce, which is their most valued resource, may determine if, or how well, they weather this inflationary economy.
Fulcrum Partners, a OneDigital Company, has released a white paper that looks at nonqualified plan benefit security issues that companies will want to review during this period of economic uncertainty.
As the report explains, even though the most optimally structured rabbi trust agreement will never provide a completely secure nonqualified plan account in the event of an employer’s insolvency, a well-designed trust agreement can provide significant protection in the event of a change of heart, change in management, or change in control.
We invite you to read Rabbi Trusts in an Inflationary Economy.
The report is based on “Rabbi Trust: An Important Element of a Nonqualified Executive Benefit Plan during Times of Financial Stress,” previously published by Fulcrum Partners.
[i] “Fed will succeed in bringing inflation down over next couple of years, Bernanke says” https://www.marketwatch.com/story/fed-will-succeed-in-bringing-inflation-down-over-next-couple-of-years-bernanke-says-11653322132
[ii] “Stiglitz Says Fed Rate Hikes Killing Economy Won’t Fix Inflation,” https://www.bloomberg.com/news/articles/2022-05-23/stiglitz-says-us-rate-hikes-killing-economy-won-t-fix-inflation
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.
Securities offered through Lion Street Financial, LLC (LSF) and Valmark Securities, Inc. (VSI), each a member of FINRA and SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA) and Valmark Advisers, Inc. (VAI), each an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI and LSF/LSA are non-affiliated entities and separate entities from OneDigital and Fulcrum Partners.
Unless otherwise noted, VAI/VSI, LSF/LSA are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.
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