The question is important because a top hat plan does not have to comply with ERISA’s funding, vesting and participation rules.
The latest skirmish in this battle is Dennis Walter Bond, et al. v. Marriott International, Inc., Case No. 10-CV-1256-RWT, 04-30-2014. The plaintiff/employees in that case filed an appeal to the U.S. Court of Appeals for the Fourth Circuit on the lower court’s decision that the Marriott’s Deferred Stock Incentive Plan is a top hat plan and that as a consequence those employees were not entitled to the ERISA protections mentioned above.
Labor Department Amicus Brief
Into the fray comes the U.S. Department of Labor with an amicus brief arguing that the law and the Labor Department’s position have been clear for some time. And that is:
A plan is not a top hat plan if it covers evens one employee who is not part of the select management group or is not a highly compensated employee.
Who is in your Plan?
This case and the brief, perhaps, are a reminder to employers to re-examine the eligibility provisions of their non-qualified deferred compensation plans. Are employees appropriately in the plan, consistent with the top hat rules? What employees can safely be considered highly compensated or part of a select management group? Is the plan skating on thin ice?
As to the reference to the “whale” in the title of this blog, it’s part of a prepositional phrase modified by an adverb --- really! So dust off your grammar books, prime yourself for some Shakespeare, and go the Labor Department’s brief to learn more about the Labor Department’s position on the topic.