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ARTICLE · 14 JANUARY 2025

Check On Your Unicorns: Is Your Top-Hat Plan Really A Top-Hat Plan?

Reinhart, Boerner, Van Deuren SC
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If you were to ask benefits professionals which type of plan is simplest to oversee, many of them would likely say top-hat plans. That is because while they are technically ERISA plans, top-hat plans are not subject.

United StatesEmployment and HR
Emily Pellegrini
Emily Pellegrini
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If you were to ask benefits professionals which type of plan is simplest to oversee, many of them would likely say top-hat plans. That is because while they are technically ERISA plans, top-hat plans are not subject to ERISA's most stringent requirements, including the participation and vesting rules, minimum funding requirements or fiduciary responsibility. As a result, many organizations have a tendency to "set and forget" their top-hat plans, often for years at a time. Unfortunately, such organizations often forget the most important fact about top-hat plans: in order to remain exempt from most of ERISA's requirements, top-hat plans must continuously satisfy a certain set of criteria.

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