Secular Trust Secular Trust
A form of employee benefit in which an employer establishes an irrevocable trust to provide non-qualified deferred compensation to certain key employees. In contrast to a Rabbi Trust, the Secular Trust is not subject to claims of the employer's creditors. Employer contributions in which the employee is vested are immediately taxable as income to the employee upon contribution. Any income earned prior to distribution to the employee is taxed to the trust, rather than the employer.