Q. An employer wants to establish a top hat plan for its directors. How does it do that?
A. The employer should take three steps:
- 1.) It should have its provider or third party administrator (TPA) provide a top hat plan document for adoption by the governing board.
- 2.) It should file a letter with the Department of Labor (a sample of the letter should be provided to the employer by a plan provider or TPA) to gain the necessary exemption from ERISA.
- 3.) Work with affected employees to get their 457(b) accounts established.