Nonqualified deferred compensation “top hat” plans do not require annual Form 5500s. Instead, the Department of Labor requires a Top Hat plan disclosure letter whenever a new plan is implemented. Nonqualified Deferred Compensation Plans enable executives and other high-income earners to defer income beyond the limits of qualified 401(k) plans. These plans garner more attention any time there are tax law changes or changes in corporate benefit plans in which companies contribute less to an executive’s retirement plan, thereby motivating the executive to defer or otherwise protect more of his or her pre-tax earnings.
The following announcement by AALU, shared by Fulcrum Partners, looks at proposed changes for how plan administrators will file Top Hat Plan statements in the future.