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Abstract
[...]the purchase of a COLI contract in connection with a nonqualified deferred compensation plan may be much less attractive. A Fifth Circuit court decision explains that an unfunded nonqualified deferred compensation plan is subject to the enforcement provisions of Part 5 of Title I of ERISA and federal law. In Tolbert v. RBC Capital Markets Corp., 758 F.3d 619 (5th Cir. 2014), the Fifth Circuit Court of Appeals ruled that an administrative assistant seeking $27,000 under her company's wealth accumulation plan won her appeal by convincing the U.S. Court of Appeals for the Fifth Circuit that the plan was governed by federal benefits law. Reversing a contrary district court decision, the Fifth Circuit found that the plan-sponsored by financial services company RBC Capital Markets Corp.-qualified as a pension plan under the Employee Retirement Income Security Act, because it resulted in the deferral of compensation past the point of an employee's termination of employment.