rabbi trust

A specific trust set up by employers for employees who are under non-qualified deferred compensation plans. The funds are highly regulated, and usually involve a degree of risk of forfeiture if certain guidelines are not followed. Once the money is placed in the fund, the employer is no longer able to access the money, and it is saved for the employee as long as all the guidelines are followed. It gets its name because the first of these trusts was developed for a rabbi.

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