{"id":5070,"date":"2014-12-09T05:48:07","date_gmt":"2014-12-09T13:48:07","guid":{"rendered":"http:\/\/blog.paladinregistry.com\/?p=5070"},"modified":"2014-12-08T14:48:42","modified_gmt":"2014-12-08T22:48:42","slug":"deferred-compensation-protected-erisa","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/","title":{"rendered":"Deferred Compensation May be Protected by ERISA"},"content":{"rendered":"

\"deferred<\/a>Brokers should be aware of the implications of a recent court decision and take note that they may be entitled to the money in their deferred compensation accounts whether or not the plan has vested, and whether or not they leave a firm of their own accord or if they are fired for cause. Additionally, employers in the financial services industry should take note on their own deferred compensation plans.<\/p>\n

Brokers often receive some sort of deferred compensation plan when they join a new broker dealer, both as an incentive to join the firm and as a carrot and stick to keep the broker. Brokers typically will have to repay the firm the deferred compensation if they leave the firm before the plan vests. (Vesting is typically in the 5-7 year range) \u00a0Deferred compensation is an arrangement in which a portion of an employee’s income is paid out at a later date after which the income was actually earned. \u00a0These plans have generally been assumed to be exempt from the Employee Retirement Income Security Act of 1974<\/a>, as amended (“ERISA”) because they have been considered non-qualified deferred compensation plans. ERISA\u2019s coverage extends to, among other types of plans, \u201cemployee pension benefit plan[s].\u201d \u00a0An employee pension benefit plan, in turn, is defined as \u201cany plan, fund, or program\u201d that, \u201cby its express terms or as a result of surrounding circumstances,\u201d either \u201c(i) provides retirement income to employees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond.\u201d<\/p>\n

The case that may have changed the landscape in whether these plans are subject to ERISA protections is the recent 5th<\/sup> Circuit case of Tolbert v. RBC Capital Markets<\/a>.\u00a0 <\/em>In the case one plaintiff forfeited vested amounts when she was terminated for cause.\u00a0 The other two plaintiffs forfeited unvested amounts when they resigned.\u00a0 The lower court found that the plan was not an ERISA protected plan and did not consider whether the plan was a top hat plan.\u00a0 Top hat plans<\/a> are exempt from ERISA protections.\u00a0 The Fifth Circuit held that the plan was a pension plan under ERISA, which provides that a plan is a pension plan “to the extent that by its express terms or as a result of surrounding circumstances \u2026 [the plan] results in a deferral of income by employees for periods extending to the termination of covered employment or beyond.” \u00a0The court sent the plan back to the lower court to decide if the plan was a top hat plan which would make it exempt from the protections ERISA provides.<\/p>\n

The Fifth Circuit seems to have taken the position that a non-qualified deferred compensation plan is an ERISA pension plan if it permits deferral of compensation to termination of employment. \u00a0Brokers are often lured to work at a new broker dealer by these plans or are encouraged to stay at their current firm and wait for the plan to vest. Now though, they may be entitled to the benefits of these plans in a much wider set of circumstances.<\/p>\n

To learn more about Richard Frankowski, visit The Frankowski Firm<\/a>.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Brokers should be aware of the implications of a recent court decision and take note that they may be entitled to the money in their deferred compensation accounts whether or not the plan has vested, and whether or not they leave a firm of their own accord or if they are fired for cause. Additionally, employers in the financial services industry should take note on their own deferred compensation plans.<\/p>\n","protected":false},"author":35,"featured_media":5074,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[117],"tags":[],"class_list":["post-5070","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement"],"yoast_head":"\nDeferred Compensation May be Protected<\/title>\n<meta name=\"description\" content=\"Brokers should be aware that they may be entitled to money in their deferred compensation accounts regardless of vesting or reasons for leaving the firm.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deferred Compensation May be Protected\" \/>\n<meta property=\"og:description\" content=\"Brokers should be aware that they may be entitled to money in their deferred compensation accounts regardless of vesting or reasons for leaving the firm.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/\" \/>\n<meta property=\"og:site_name\" content=\"Paladin Registry Blog\" \/>\n<meta property=\"article:published_time\" content=\"2014-12-09T13:48:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2014-12-08T22:48:42+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"620\" \/>\n\t<meta property=\"og:image:height\" content=\"360\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Richard Frankowski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@PaladinRegistry\" \/>\n<meta name=\"twitter:site\" content=\"@PaladinRegistry\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Richard Frankowski\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/\",\"name\":\"Deferred Compensation May be Protected\",\"isPartOf\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg\",\"datePublished\":\"2014-12-09T13:48:07+00:00\",\"dateModified\":\"2014-12-08T22:48:42+00:00\",\"author\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/43137d13ff719c8e5ff62b62530d7c26\"},\"description\":\"Brokers should be aware that they may be entitled to money in their deferred compensation accounts regardless of vesting or reasons for leaving the firm.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#primaryimage\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg\",\"contentUrl\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg\",\"width\":620,\"height\":360},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.paladinregistry.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Retirement\",\"item\":\"https:\/\/www.paladinregistry.com\/blog\/category\/retirement\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Deferred Compensation May be Protected by ERISA\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#website\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/\",\"name\":\"Paladin Registry Blog\",\"description\":\"Helping You Make Better Financial Decisions\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.paladinregistry.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/43137d13ff719c8e5ff62b62530d7c26\",\"name\":\"Richard Frankowski\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/04\/Richard-Frankowski1-96x96.jpg\",\"contentUrl\":\"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/04\/Richard-Frankowski1-96x96.jpg\",\"caption\":\"Richard Frankowski\"},\"description\":\"Richard Frankowski is licensed in Alabama and Florida and a Member of The Frankowski Firm, LLC, Mr. Frankowski\u2019s practice focuses on complex consumer and commercial litigation with an emphasis on securities litigation and arbitration. He has participated in class cases pending in Alabama, California, Florida, Massachusetts, New York, North Carolina and West Virginia. Mr. Frankowski has represented hundreds of consumers in over 80 FINRA arbitrations. These cases have involved claims of suitability, churning, fraud, negligence, and violations of state securities acts.\",\"sameAs\":[\"http:\/\/www.frankowskifirm.com\",\"http:\/\/www.linkedin.com\/pub\/richard-frankowski\/2b\/310\/468\"],\"url\":\"https:\/\/www.paladinregistry.com\/blog\/author\/richard-frankowski\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Deferred Compensation May be Protected","description":"Brokers should be aware that they may be entitled to money in their deferred compensation accounts regardless of vesting or reasons for leaving the firm.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/","og_locale":"en_US","og_type":"article","og_title":"Deferred Compensation May be Protected","og_description":"Brokers should be aware that they may be entitled to money in their deferred compensation accounts regardless of vesting or reasons for leaving the firm.","og_url":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/","og_site_name":"Paladin Registry Blog","article_published_time":"2014-12-09T13:48:07+00:00","article_modified_time":"2014-12-08T22:48:42+00:00","og_image":[{"width":620,"height":360,"url":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg","type":"image\/jpeg"}],"author":"Richard Frankowski","twitter_card":"summary_large_image","twitter_creator":"@PaladinRegistry","twitter_site":"@PaladinRegistry","twitter_misc":{"Written by":"Richard Frankowski","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/","url":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/","name":"Deferred Compensation May be Protected","isPartOf":{"@id":"https:\/\/www.paladinregistry.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#primaryimage"},"image":{"@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#primaryimage"},"thumbnailUrl":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg","datePublished":"2014-12-09T13:48:07+00:00","dateModified":"2014-12-08T22:48:42+00:00","author":{"@id":"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/43137d13ff719c8e5ff62b62530d7c26"},"description":"Brokers should be aware that they may be entitled to money in their deferred compensation accounts regardless of vesting or reasons for leaving the firm.","breadcrumb":{"@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#primaryimage","url":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg","contentUrl":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/11\/deferred-compensation.jpg","width":620,"height":360},{"@type":"BreadcrumbList","@id":"https:\/\/www.paladinregistry.com\/blog\/retirement\/deferred-compensation-protected-erisa\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.paladinregistry.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Retirement","item":"https:\/\/www.paladinregistry.com\/blog\/category\/retirement\/"},{"@type":"ListItem","position":3,"name":"Deferred Compensation May be Protected by ERISA"}]},{"@type":"WebSite","@id":"https:\/\/www.paladinregistry.com\/blog\/#website","url":"https:\/\/www.paladinregistry.com\/blog\/","name":"Paladin Registry Blog","description":"Helping You Make Better Financial Decisions","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.paladinregistry.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/43137d13ff719c8e5ff62b62530d7c26","name":"Richard Frankowski","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.paladinregistry.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/04\/Richard-Frankowski1-96x96.jpg","contentUrl":"https:\/\/www.paladinregistry.com\/blog\/wp-content\/uploads\/2014\/04\/Richard-Frankowski1-96x96.jpg","caption":"Richard Frankowski"},"description":"Richard Frankowski is licensed in Alabama and Florida and a Member of The Frankowski Firm, LLC, Mr. Frankowski\u2019s practice focuses on complex consumer and commercial litigation with an emphasis on securities litigation and arbitration. He has participated in class cases pending in Alabama, California, Florida, Massachusetts, New York, North Carolina and West Virginia. Mr. Frankowski has represented hundreds of consumers in over 80 FINRA arbitrations. These cases have involved claims of suitability, churning, fraud, negligence, and violations of state securities acts.","sameAs":["http:\/\/www.frankowskifirm.com","http:\/\/www.linkedin.com\/pub\/richard-frankowski\/2b\/310\/468"],"url":"https:\/\/www.paladinregistry.com\/blog\/author\/richard-frankowski\/"}]}},"_links":{"self":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts\/5070"}],"collection":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/comments?post=5070"}],"version-history":[{"count":5,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts\/5070\/revisions"}],"predecessor-version":[{"id":5076,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/posts\/5070\/revisions\/5076"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/media\/5074"}],"wp:attachment":[{"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/media?parent=5070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/categories?post=5070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paladinregistry.com\/blog\/wp-json\/wp\/v2\/tags?post=5070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}