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Question 29 — Top Hat Plans

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.