a trust arrangement in which deferred compensation plan assets are placed in trust to provide employees with a great level of security, but without tax deferral of contributions to the plan; in some cases, double taxation can occur where employees are taxed on current contributions and the employer is denied a current tax deduction
an irrevocable trust created to fund non-qualified deferred compensation liabilities
a part of a nonqualified deferred compensation plan
a trust in which the executive's interest vests either immediately or upon the happening of one or more events, such as the attainment of a stated age, change of control, termination of employment, death, disability, etc
An irrevocable trust which is a separate tax-paying entity from the company. Assets contributed to a secular trust are currently taxable to the trust beneficiary. In contrast to a rabbi trust, a secular trust is beyond reach of corporate creditors in the event of bankruptcy.
A trust into which an employer contributes money to fund a deferred compensation obligation. Because the employeeâ€(tm)s rights are nonforfeitable, the employee is taxed immediately on the contributions to the trust, and the employer gets an immediate tax deduction.
A secular trust is a trust used to formally fund and secure nonqualified deferred compensation. Since funds placed in a secular trust are not subject to the claims of the employer's creditors, they are generally subject to current taxation.