In Sikora v. UPMC, No. 1288 (3rd Cir. 2017), the Third Circuit Court of Appeals (the “Court”) noted that a so-called “top-hat” plan is “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.” 29 U.S.C. §§ 1101(a)(1), 1051(2), 1081(a)(3). These plans need not comply with many of the substantive provisions of ERISA. In this case, when Paul F. Sikora sought to recover pension benefits under ERISA, the district court held that he was not entitled to obtain such relief because he sought benefits under a top-hat plan.
Sikora appeals, arguing that the district court should have required defendants, the University of Pittsburgh Medical Center and its Health System and Affiliates Non-Qualified Supplemental Benefit Plan (collectively, “UMPC”), to prove that plan participants had bargaining power before concluding that he participated in a top-hat plan. However, the Court said that plan participant bargaining power is not a substantive element of a top-hat plan. Therefore, the Court affirmed the District Court’s judgment.