On September 30, 2014, the Department of Labor’s Employee Benefits Security Administration (DOL/EBSA) published a proposed regulation that would require electronic filing of “top hat” plan statements.
A top hat plan is a nonqualified plan that is unfunded, covers a select group of management and/or highly compensated employees and allows the participant to defer income to the termination of covered employment or beyond. Top hat plans are exempt from the participation, benefit accrual, vesting and fiduciary rules under the Employee Retirement Income Security Act (ERISA). Filing a top hat notice within 120 days of implementation of the plan makes the notice “timely,” and it exempts the plan from most reporting and disclosure requirements, such as providing a summary plan description and filing Form 5500 annually.
The new website will make paper filings of the top hat plan statement obsolete in the future. Under the prior paper filing system when top hat statements were mailed in, the DOL would not notify the plan provider that it had received the statement. Further, there was no way to search prior filings to determine if a specific plan had filed a top hat statement in the past. E-filing of top hat plan statements will eliminate both of these problems. E-filers will get immediate notification that the statement has been submitted to the DOL/EBSA and moving forward, any e-filed top hat plan statements will be available online for future reference.
Another problem that paper filers had in the past concerned what information should be provided on the top hat plan statement. The website clears this up somewhat, providing fields for all of the required information.
To access the top hat statement website, click here: https://www.askebsa.dol.gov/efile/Home/tophat.
For more information on how bank or corporate-owned life insurance (COLI) can help your business, please contact a consultant at Executive Benefits Network.