What is the purpose of the NQP Rabbi Trust established by Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company has a Nonqualified Deferred Compensation Plan ("NQP") in which key management employees of the Company, as determined by the Board of Directors, are selected to participate. The NQP was restated effective December 1, 2020, to provide for the use of a Rabbi Trust and to amend the design of the Company's contributions. Effective December 1, 2020, the Company established a NQP Rabbi Trust ("Trust"), whereby the Company makes contributions to this Trust to provide the Company a source of funds to assist in satisfying the NQP liability. The investments included in this Trust are carried at fair value and recorded in Restricted Rabbi Trust investments in the Consolidated Statements of Financial Position (see note 13).
(13) Deferred Compensation Plans and Restricted Rabbi Trust Investments
Nonqualified Deferred Compensation Plan ("NQP") and Restricted Rabbi Trust Investments
The Company has a NQP in which key management employees of the Company, as determined by the Board of Directors, are selected to participate. The NQP is a defined contribution plan, in which participating employees may defer a percentage of their annual salaries and a percentage of any incentive compensation into the NQP. The Company contributes: (i) a non-discretionary contribution of 3% of a participating employee's compensation each pay period, and (ii) an annual discretionary contribution, as determined by the Board of Directors, up to 9% of a participating employee's annual compensation.
The Company utilizes a Trust, whereby the Company makes contributions to this Trust to provide the Company a source of funds to assist in satisfying the NQP liability. It is the intention of the Company that the NQP and the Trust shall constitute an unfunded arrangement for the purpose of providing tax-deferred compensation in accordance with Title I of the Employee Retirement Income Security Act of 1974, as amended. It is also the intention of the Company to fund the Trust and have its assets invested in a manner that matches each participant's deemed investment elections under the NQP, so that the investment gains and losses of the Trust mirror the investment gains and losses credited/debited to participants' accounts. The Trust balance was $17.2 million and $17.0 million as of November 30, 2024 and 2023, respectively. Realized and unrealized gains and losses on these investments were realized gains of $0.7 million and unrealized gains of $3.1 million, for the year ended November 30, 2024, and were realized gains of $0.3 million and unrealized gains of $0.7 million,
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company has established a Nonqualified Deferred Compensation Plan (NQP) for key management employees, selected by the Board of Directors, which allows these employees to defer a percentage of their annual salaries and incentive compensation. To support this plan, Bw Premier Collection created an NQP Rabbi Trust, effective December 1, 2020. The primary purpose of this Trust is to provide Bw Premier Collection with a dedicated source of funds to help meet its financial obligations under the NQP. The company makes contributions to the Trust to ensure it has the necessary resources to cover the deferred compensation liabilities.\n\nThe Trust is intended to operate as an unfunded arrangement for tax purposes, aligning with Title I of the Employee Retirement Income Security Act of 1974. This means that while the funds are set aside, they are still considered part of the company's assets and are subject to claims by the company's creditors. The assets within the Trust are invested in a manner that mirrors each participant's investment elections under the NQP. This approach ensures that the investment gains and losses within the Trust directly reflect the gains and losses credited or debited to the participants' individual accounts.\n\nAs of November 30, 2024, the Trust balance was $17.2 million, compared to $17.0 million on November 30, 2023. In 2024, the Trust experienced realized gains of $0.7 million and unrealized gains of $3.1 million. These gains are recognized in the Consolidated Statements of Revenues and Expenses, indicating how the Trust's performance impacts the company's overall financial statements. The establishment and management of this Trust reflect Bw Premier Collection's strategy to provide deferred compensation benefits to its key employees while maintaining a dedicated funding source to meet these obligations.