ERISA & Employee Benefits

Deal-Breaking M&A Issues Related to Employee Benefit Plans and Executive Compensation

Employee benefit and executive compensation related issues have been known to unravel merger and acquisition transactions. These sometimes seriously disruptive issues can explode an otherwise viable deal when overlooked until the last minute. The list below is intended to facilitate the detection, negotiation, and resolution of possible employee benefit plan and executive compensation related ...

Non-ERISA 403(b) Plans may be Subject to Proposed SEC Regulation Best Interest

Although the DOL Fiduciary Rule and related prohibited transaction exemptions are not officially dead until the Court of Appeals for the Fifth Circuit issues its mandate vacating the rule in toto, an event anxiously awaited by the financial industry, recent attention has been focused on the proposed guidance by the SEC (for our newsletter summary click here) particularly the proposed Regulation ...

Moving the Bonus Plan Goalposts - Be Smart or Be Sued

Whenever a company announces performance goals that apply to cash bonus, equity award, or vesting conditions, there is some risk that affected employees will later question the end-of-period determinations. Well-drafted plans and programs include significant employer protections. But some defects can really come back to haunt employers, such as the failure to allow for the impact of a future ...

ERISA and Severance Benefits: 3rd Circuit Decision Should Prompt Employers to be Proactive

A recent 3rd Circuit Court of Appeals decision should remind employers to take the initiative -- in severance plans and agreements -- to affirmatively address whether ERISA will govern plan disputes, as well as how disputes will get resolved. This is because a well-drafted ERISA plan should expedite the resolution of employee claims in a cost-effective manner that involves a high level of ...

Voluntary Severance Plans: From Success to Backfire

What happens when 3,000 employees over age 55 receive a buy-out offer because they have more than 10 years of experience? Fidelity made that offer to 7% of its workforce, and more than 50% of the eligible employees accepted. Fidelity's "results exceeded [its] expectations" according to a Bloomberg BNA article.1

DOL Issues FAB 2018-1

On April 23rd, in Field Assistance Bulletin ("FAB") 2018-01, the DOL provided guidance to the Employee Benefits Security Administration's national and regional offices on how to respond to inquiries about Interpretive Bulletin ("IB") 2016-01 relating to shareholder rights and written investment policy statements and IB 2015-01 relating to economically targeted investments. Perhaps not ...

2018 Update for Internal Revenue Code Section 162(m) Changes

The Tax Cuts and Jobs Act of 2017 made fundamental changes to Section 162(m) of the Internal Revenue Code. The general nature of those changes is noted below, along with thoughts about their impact on public companies - and next steps that compensation committees should consider. Forward-minded action is warranted in order to preserve corporate deductions, especially for severance and other ...

Tax Exempt Organizations: Get Your Filings Right - Or Else...

At the IRS, does anyone really read Form 990s, 990-EZs, and 990-PFs? Interestingly, the first level reader is apparently not a human . . . but an IRS computer. Those who prepare 990 filings should take notice because their mistakes could trigger an IRS audit.

Court of Appeals Decision on Fiduciary Rule Changes the Legal Landscape and Creates Uncertainty

The viability of the DOL's Fiduciary Rule and related exemptions was put in some doubt yesterday by a Court of Appeals decision that "vacate[s] the Fiduciary Rule in toto." The U.S. Court of Appeals for the Fifth Circuit, in U.S. Chamber of Commerce v. United States Department of Labor, upheld a comprehensive challenge brought by the U.S. Chamber of Commerce, SIFMA, the American Council of Life ...

Qualified Plan Changes in Bipartisan Budget Act of 2018

On February 9, 2018, Congress passed the Bipartisan Budget Act of 2018 ("Budget Act"). This two-year budget agreement contains a number of provisions relating to tax-qualified retirement plans, including hardship withdrawal changes, improper levies, and disaster relief provisions.