From the Employee Benefits Law Report, an article by Greg Daugherty of Porter Wright Morris & Arthur LLP, looks at the scope and definition of who is a “participant” in a nonqualified deferred compensation plan. Daugherty points out that although companies have frequently considered the word participant to only include participants who are current employees, the courts may not always look at the matter in this same way.
Nonqualified Deferred Compensation Plan Language Becomes Subject of Lawsuit
When retired employees of Bausch & Lomb brought suit against the company claiming ERISA violations regarding payouts and termination of benefits, the company took the position that the retired employees were a actually a “subset” of participants. The court’s ruling came down to the Plan’s language, which serves as a powerful reminder of the value of thoughtful and strategic Plan design.
You can read the article, in full by clicking here: Who is “participant” in a nonqualified plan? Second Circuit case highlights importance of defined terms