A Rabbi trust is a legal arrangement that helps protect nonqualified plan benefits if a change in control event, such as a merger or acquisition, occurs. The trustee enforces the Rabbi trust document to ensure that assets are managed in the best interests of plan participants following the change in control event.
Wells Fargo Executive Benefits ranks as one of the most experience Rabbi trust administrators and has facilitated more than 200 change in control events.* We are one of few providers who can provide comprehensive Rabbi trust services.
Protection of the trust
If a change in control event occurs, Wells Fargo may be designated by the trust document as the sole authority to manage the trust's assets. Depending on the trust design, the new acquiring company can be prohibited from:
- Making any trust amendments without participant approval
- Managing the trust's investments
Duties of the trustee
Wells Fargo, as the appointed trustee, may perform many enhanced duties after a change in control event occurs, including, but not limited to:
- Requiring the new company to make annual contributions to the trust to ensure the assets are equal to or greater than the nonqualified plan liabilities
- Implementing an investment strategy for the trust portfolio
- Monitoring the trust's investment performance to ensure the assets are available to meet benefit payments
- Determining participant benefit payments in the event of a dispute between an employee and the new company
To speak with a Wells Fargo Institutional Retirement and Trust representative, please call 1-800-887-1562, or contact us.
* Data as of December 31, 2013.
Recordkeeping, trustee, and/or custody services are provided by Wells Fargo Institutional Retirement and Trust, a business unit of Wells Fargo Bank, N.A. This information and any information provided by employees and representatives of Wells Fargo Bank, N.A. is for educational purposes only and does not constitute investment, financial, tax, or legal advice. Please contact your investment, financial, tax, or legal advisor regarding your specific needs and situation.
Rabbi trust assets are not protected in bankruptcy and are subject to the claims of the company's creditors.