Report: The Use of Rabbi Trusts in an Inflationary Economy
With the inflationary economy on almost everyone’s mind, the Executive Benefits Team, OneDigital has issued a revised report on the use of Rabbi Trusts during times of economic unpredictability.
Rabbi Trusts in an Inflationary Economy
Last week, Former Federal Reserve Chairman Ben Bernanke, in a discussion at the Brookings Institution, said that he thinks, “the Fed will bring inflation down over the next couple of years[i].” On the same day, Bloomberg News reported on comments from Columbia University professor and Nobel laureate, Joe Stiglitz, at the World Economic Forum. Stiglitz stated, “Raising interest rates is not going to solve the problem of inflation[ii].”
Find out which 2 primary events allow for the termination of a nonqualified plan.
How long inflation continues, how high it goes, and what factors ultimately turn it around are up for speculation and educated guessing. But how companies manage their resources, including their workforce, which is their most valued resource, may determine if, or how well, they weather this inflationary economy.
The Executive Benefits Team, OneDigital has released a white paper that looks at nonqualified plan benefit security issues that companies will want to review during this period of economic uncertainty.
As the report explains, even though the most optimally structured rabbi trust agreement will never provide a completely secure nonqualified plan account in the event of an employer’s insolvency, a well-designed trust agreement can provide significant protection in the event of a change of heart, change in management, or change in control.
We invite you to read Rabbi Trusts in an Inflationary Economy.
The report is based on “Rabbi Trust: An Important Element of a Nonqualified Executive Benefit Plan during Times of Financial Stress,” previously published.
[i] “Fed will succeed in bringing inflation down over next couple of years, Bernanke says” https://www.marketwatch.com/story/fed-will-succeed-in-bringing-inflation-down-over-next-couple-of-years-bernanke-says-11653322132
[ii] “Stiglitz Says Fed Rate Hikes Killing Economy Won’t Fix Inflation,” https://www.bloomberg.com/news/articles/2022-05-23/stiglitz-says-us-rate-hikes-killing-economy-won-t-fix-inflation
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.
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