Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE

Executive Compensation

A standard part of an executive compensation package can be participation in a nonqualified deferred compensation plan. This is a plan not subject to tax code limitations on qualified retirement plans and not subject to many provisions of ERISA, including the requirement that plan assets be set aside in a trust, protected from company creditors.

A recent Eighth Circuit Court of Appeals decision involved high ranking executives who participated in a company’s long-term incentive plan. Under the plan agreements, executives who did not continue employment for a three year performance period forfeited benefits under the plan unless they qualified for a pro-rated award. A pro-rated award was available for participants

I blogged recently about an Eighth Circuit decision concluding that an agreement with a single employee cannot be an ERISA plan because a plan necessarily requires more than one participant. Other courts disagree. Recently the United States District Court for the District of Idaho in the case of Knoll v. Moreton Insurance of Idaho, Inc

In a recent District Court decision, a court held that non-qualified deferred compensation benefits being paid  to a participant under a “top hat” plan could be garnished by the participant’s creditor. Employers who sponsor plans covered by ERISA know that creditors cannot garnish a participant’s benefits under a qualified retirement plan. Any state laws

If an arrangement is subject to ERISA, state law claims relating to that arrangement are preempted. In some situations, therefore, employers try to argue that a particular arrangement is subject to ERISA. In a recent decision involving a state law breach of contract claim, the Eighth Circuit Court of Appeals determined that a deferred compensation