Rabbi Trust


Also found in: Wikipedia.

Rabbi Trust

A trust in which one may deposit employee compensation such that taxation is deferred to a future date. This is done most commonly when the compensation would be deposited otherwise into a retirement plan that is not tax deductible. It derives its name from the fact that the first one was intended to benefit a rabbi.
References in periodicals archive ?
In addition, in two separate block trades, Golub Capital Company VI LLC sold 64,000 shares to an investment vehicle for which GC Advisors serves as a sub advisor and sold 55,583 shares to Golub Capital Employee Grant Program Rabbi Trust (the "Rabbi Trust").
14) A so-called rabbi trust (discussed below) does not violate the no formal funding requirement and does provide participants with some enhanced assurance that their benefits will be paid except in cases of the employer's legal insolvency or bankruptcy.
For example, an executive could have the choice to assign $100,000 of his deferred compensation funds to be invested in an 80%/20% stock/bond portfolio, and the company could place $100,000 in a Rabbi Trust and invest the funds accordingly.
Deferred money can be placed into a dedicated account like a sinking fund or a Rabbi Trust, a kind of grantor trust that is actually a TOLI.
A rabbi trust is a security device for a deferred compensation plan for which an employer sets aside and contributes amounts to an irrevocable trust on behalf of one or more employees.
The Department of Labor (DOL) does not consider a rabbi trust arrangement to be funded for ERISA purposes solely because of the establishment and operation of a trust (DOL Advisory Opinion 89-22A).
Shares held by the Rabbi Trust on 29 December 2005: 26,114,728 Shares held by the Rabbi Trust on 30 December 2005 26,110,360 Movement: 4,368 Percentage of issued class in Rabbi Trust on 30 December 2005: 1.
92-64(8) provided a model rabbi trust that includes various options for trust design.
With considerable input from FEI and the business community, Thomas realized that the elimination of the rabbi trust would have effectively eliminated deferred compensation programs altogether.
The effectiveness of a rabbi trust is dependent on how it is funded and the strength of the trustee.
A rabbi trust involves the use of an independent trust that protects the funds in this situation.