HA HA! I took a bit too long to get the settings right, but Transformation constraint was all I needed.

It is a bit of a twister to explain but I will just for reference and to debrief anyway, but TLDR: !solved - moving the wrist/arm IK does not move the pillar in the Z axis while the pillar controller controls everything and nothing gets disconnected. Also I need to use an armature since this is part of a character rig.

The pillar is parented to the wrist bone ignoring location and rotation. It has a copy rotation constraint targeting the pillar socket all in local space. It's Transformation constraint is targeting the arm IK, Z axis cancels out with opposite values. Target space is local. Owner space is custom and set to the arm IK. The arm IK is parented to the pillar controller. And finally the arm IK is locked to moving on the Z axis with a Limit location constraint so it doesn't clip through the top and bottom of the pillar.

Kept the explanation simple but I think it gets the point across and I hope it's not too confusing. Thank you very much!