Rabbi Trust

AAA

DEFINITION of 'Rabbi Trust'

A trust created for the purpose of supporting the non-qualified benefit obligations of employers to their employees.

These trusts are sometimes referred to as "grantor trusts".

INVESTOPEDIA EXPLAINS 'Rabbi Trust'

Called a Rabbi trust due to the first initial ruling made by the IRS on behalf of a synagogue, these forms of trusts create security for employees because the assets within the trust are typically outside the control of the employers and are irrevocable.

RELATED TERMS
  1. Qualified Trust

    A tax-advantaged fiduciary relationship between an employer and ...
  2. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  3. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  4. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Trustor

    An individual or organization that gifts funds or assets to others ...
Related Articles
  1. Options & Futures

    A New Approach To Equity Compensation

    The new financial accounting standard known as FAS 123R could take a bite out of your portfolio. Find out why here.
  2. Insurance

    Is Your Employer-Provided Life Insurance Coverage Enough?

    Learn about the several potential problems involved with obtaining life insurance through your employer.
  3. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
  4. Retirement

    Job Hunting: Higher Pay Vs. Better Benefits

    Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff.
  5. Professionals

    Maintaining Work/Life Balance For Financial Professionals

    Maintaining work/life balance is a challenge for most professionals in the finance industry, but it doesn't have to be that way.
  6. Personal Finance

    Seven Considerations When You Negotiate Severance

    Someday the ax will fall. It happens in almost every career. Here's how to survive and move on.
  7. Investing Basics

    Get The Most Out Of Employee Stock Options

    These plans can be lucrative for employees - if they know how to avoid unnecessary taxes.
  8. Entrepreneurship

    Freelancer Or Employer: Identifying Your Next Career Move

    Although the increasing accessibility of independent contracting has created job opportunities, it is important to remember that this method of working also has considerable disadvantages in ...
  9. Personal Finance

    The Causes And Costs Of Absenteeism

    Playing hooky to play golf may feel harmless, but the accumulated effect of absenteeism hurts businesses' bottom line. This article looks at the causes of absenteeism, the costs of lost productivity ...
  10. Retirement

    What Is The Federal Employees Retirement System (FERS) And How Does It Work?

    Unless you are a government employee, you’ve likely never heard of the Federal Employees Retirement System, but if you work in the public sector or plan to in the near future, FERS is an acronym ...

You May Also Like

Hot Definitions
  1. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  2. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  3. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  5. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  6. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
Trading Center