The Internal Revenue Service issued a private ruling in 1980 regarding the legality of a trust that members of a synagogue created to compensate their rabbi.
Funds deposited in such a plan permitted by a private letter ruling would not result in income, according to Section 83(a) of the Code, if the assets of the trust were available to the employer's general creditors.
As long as the employer's financial position is sound, the money in a rabbi trust is considered to be relatively safe.
For the rabbi trust to be successfully applied, there must be a real risk of forfeiture upon the failure by the payee to fulfill the agreed upon conditions.
If the condition is impossible to fail, then constructive receipt may overcome the successful application of the rabbi trust.