Deferred Compensation News and Updates

Rabbi trusts and Secular trusts are examples of trusts an employer may establish to pay nonqualified deferred compensation benefits.

If you are trusting a Rabbi Trust to protect your retirement savings, then you might have been a little taken aback last month if you read the headline, “Ruby Tuesday Tells Court (And Retirees): ‘Pension Funds Are Ours.” In his article published in entirety below, Attorney Mike Melbinger does (as always) a thorough job breaking down the sequence of events impacting the Ruby Tuesday nonqualified plan participants.

Last week, we shared our most recent whitepaper, “Rabbi Trust: An Important Element of a Nonqualified Executive Benefit Plan during Times of Financial Stress” plus an important blog post update, “COVID-19 and the Unforeseen Emergency under IRS 409A” here on the Deferred Compensation News. In case you missed the link to read or download this report, we’re resharing it here: #ICYMI.

PONTE VEDRA BEACH, FL — (March 26, 2020) Fulcrum Partners, one of the nation’s largest executive benefits advisories, announces publication of “Rabbi Trust: An Important Element of a Nonqualified Executive Benefit Plan during Times of Financial Stress.” The whitepaper, which is available to view online or download as a PDF, provides an overview of nonqualified plan benefit security issues that are important to review during financial or economic turmoil, specifically looking at rabbi trusts as the primary benefit security tools available to nonqualified plan sponsors.

#ICYMI (In Case You Missed It), Following the news of a major acquisition of retirement business last week, we are re-sharing our comments on: Assessing Your Plan Administrator and Your Nonqualified Deferred Comp Plan or Rabbi Trust Big Changes. Inevitable Questions Earlier this week, Principal Financial Group Inc. announced that it has entered into an agreement to buy Wells Fargo & Company’s retirement plan services unit for $1.2 billion. The acquisition covers all existing Wells Fargo Institutional Retirement and Trust (IRT) business. As of December 31, 2018, the respective Wells Fargo retirement businesses had $827 billion in assets under administration served by approximately 2,500 employees in locations across the US, the Philippines and India. The transaction is expected to be finalized early in the third quarter, subject to receipt of required regulatory approval. Given the scope and timeline of this transition, questions and concerns may logically arise. The team at Fulcrum Partners is wholly independent, which enables us to provide thoughtful, strategic insights, specific to your organization’s unique needs and objectives. We can leverage our independent position to help your company identify a third-party administrator or trustee that specifically meets your objectives and the needs of your nonqualified plan participants. Evaluating

Big Changes. Inevitable Questions Earlier this week, Principal Financial Group Inc. announced that it has entered into an agreement to buy Wells Fargo & Company’s retirement plan services unit for $1.2 billion. The acquisition covers all existing Wells Fargo Institutional Retirement and Trust (IRT) business. As of December 31, 2018, the respective Wells Fargo retirement businesses had $827 billion in assets under administration served by approximately 2,500 employees in locations across the US, the Philippines and India. The transaction is expected to be finalized early in the third quarter, subject to receipt of required regulatory approval. Given the scope and timeline of this transition, questions and concerns may logically arise. The team at Fulcrum Partners is wholly independent, which enables us to provide thoughtful, strategic insights, specific to your organization’s unique needs and objectives. We can leverage our independent position to help your company identify a third-party administrator or trustee that specifically meets your objectives and the needs of your nonqualified plan participants. Evaluating the Third-Party Plan Administrator or Trustee Fulcrum Partners’ proprietary evaluation process assesses potential plan administrators based on: Ownership structure/background Client data/organization size Technology capabilities Legal and compliance resources Financial soundness and fiduciary capability Asset/liability management synchronization Participant

Washington Report (October 25, 2013) Ponte Vedra Beach, Florida – Executive benefits consulting firm, Fulcrum Partners LLC, is proud to share this AALU WR Marketplace Report on:  Rabbi Trusts – An Important Adjunct to Deferred Compensation Plans In our continuing efforts to educate our clients on the regulatory and tax issues impacting deferred compensation plans, we are sending you this AALU report on Rabbi Trusts.  The AALU WRMarketplace Report, prepared by the AALU staff and Greenberg Traurig, one of the nation’s leading law firms in tax and wealth management, provides both background and  current views on these important issues. MARKET TREND:  Recent increased interest in deferring compensation makes it important for advisors to understand how rabbi trusts might be used to assist clients in establishing and maintaining deferred compensation plans. In addition, corporate owned life insurance (“COLI”) has gained popularity in this low-interest and increasing income tax environment.  Life insurance, whose cash value grows on a tax-deferred basis, can often provide fixed rates of return that exceed yields available elsewhere.  The holding of life insurance by a rabbi trust may provide additional benefits. SYNOPSIS:  Rabbi trusts can provide executives with some security for the future payment of their deferred compensation