Top Hat Plan
Categories: Retirement, Company Management
If you’ve been offered a top hat plan, top of the morning to you! You’re probably a high-ranking exec (do you own a top hat, by chance?).
Top hat plans are offered by employers to their extra-special, extra-highly-paid employees. It’s unfunded, and gives the top hats in the plan deferred compensation.
That doesn't mean that money is being set aside especially for them. Rather, it’s coming out of the company and its assets when they’re good and ready. It’s being saved up for later rather than being paid out now (which makes sense, because anyone in the top hat club is rolling in dough anyway, so better off saving it for a rainy day...or like, retirement. Or a yacht. Depends on how tall of a top hat you have. We like the one on the Monopoly guy.)
