Rabbi Trust Agreement: Definition, Example
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What is a Rabbi Trust Agreement?
A rabbi trust agreement is a contract between an employer and its employees that establishes and regulates a company-owned trust for employees. The agreement states that once established, top-earning employees can use it to defer compensation and other excess benefits for tax purposes. It is called a rabbi trust because a rabbi and his congregation first used the agreement after an IRS letter officially approved its use. The purpose of the trust is to protect top-earning employees from tax implications, since the funds inside the account are considered tax-deferred. In other words, it puts more money into top earners' pockets, which helps companies to attract and retain top talent.
Rabbi Trust Agreement Sample
ALLIANT ENERGY CORPORATE SERVICES, INC. | WELLS FARGO BANK, N.A. | |
By: /s/ Thomas L. Hanson | By: /s/ Laurie Adams Temple | |
Thomas L. Hanson | Laurie Adams Temple | |
Its Vice President and Treasurer | Its Vice President | |
Reference:
Security Exchange Commission - Edgar Database, EX-10.2 2 lnt630201510-qex102.htm AMENDMENT TO RABBI TRUST AGREEMENT, Viewed September 27, 2022, View Source on SEC.
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