Employers consider safe-harbor plans
To pass nondiscrimination testing, employers may want to consider safe-harbor plans.
Frank Palmieri
Partner
Complying with same-sex marriage laws: 5 tips
Although the Supreme Court only recently took up the constitutionality of same-sex marriage, the issue has been around since the early 2000s, when large employers began to voluntarily offer health coverage to same-sex domestic partners.
Fee disclosure leads to questions
Frank Palmieri argues that because of increased fee disclosure to participants, more employees may start to inquire about in-service distributions.
Watch plans for undue influence
It's important to maintain strong relationships with employee benefit advisers who provide professional services at reasonable fees. However, employers must periodically question why they maintain certain relationships, particularly if fees appear to be higher than usual and/or service has declined. Sometimes a relationship is maintained with a vendor due to a long-term friendship. Other times it's maintained due to the influence of a parent corporation or for other business reasons. In all circumstances, employers should periodically evaluate vendors, fees and services, and ensure that no undue influences exist. For this reason, many employers should consider establishing a formal ERISA fiduciary gift policy.
Prepare for insurance rebate checks under PPACA
Employers must be prepared to field employee questions and take appropriate action in the event that health insurance carriers fail to comply with the Medical Loss Ratio threshold under PPACA and must issue rebates beginning next month.
Foreign stock options are tricky
As a result of foreign ownership, it's common for U.S. employees to receive stock options from foreign parents that are subject to taxation in the United States.
MEWAs under scrutiny
ERISA defines a multiple employer welfare arrangement as an employee welfare plan or any other arrangement which is established or maintained for the purpose of providing welfare benefits to the employees of two or more "unrelated" entities. Thus, if a welfare plan is maintained by an employer for the exclusive purpose of providing benefits to that employer's employees, former employees (e.g., retirees) or beneficiaries (e.g., spouses, former spouses, dependents) of such employees, the plan will be considered a "single employer" plan and not a MEWA.
Be prepared for HIPAA audits
Most employers have become accustomed to the IRS and Department of Labor periodically auditing their qualified retirement plans. Now, employers must also be ready for HIPAA audits.
Maintaining status takes planning
Prior to 2006, employers were required to submit determination letter requests to the IRS during certain periods. These periods – during which plans were required to be amended for various tax acts, such as the Economic Growth and Tax Relief Reconciliation Act of 2001 – are referred to as the remedial amendment periods. In Revenue Procedure 2005-66, as modified by Revenue Procedure 2007-44, the IRS created a staggered determination letter program. This process was established to spread the IRS' work over a period of years, thus freeing up resources to perform retirement plan audits. The periods to submit qualified retirement plans for determination letters are based upon a plan sponsor's employer identification number.
Post-acquisition benefit plans pose challenges
Acquisitions often occur for different reasons: Sometimes a company is looking to expand within its market sector; other times, a company is looking to expand outside of its traditional business operations for future growth and expansion.
Counting participants for reporting purposes sounds simple, but rules can be tricky
Employers maintaining qualified retirement plans are generally required to file an annual Form 5500 regardless of the number of participants in the plan, except for one-participant plans with less than $250,000 in assets.
When is ERISA preemption permitted? Beneficiary designation forms can cause headaches for benefits administrators
Benefit administrators, 401(k) vendors, recordkeepers and benefits professionals regularly recommend that participants in qualified retirement plans periodically review and update their beneficiary designation forms. Qualified retirement plans provide that if a married participant dies without a beneficiary designated, the death benefit will be paid to the participant's spouse, unless the spouse consents in writing to appointing an alternate payee. For a single participant, benefits are paid to their estate if no beneficiary is designated. What could be simpler that merely indicating to whom or to what entity a participant wishes their assets to be transferred in the event of death? Unfortunately, numerous issues arise in connection with the simple task of designating a beneficiary.
Nothing is simple
What could be simpler than merely indicating to whom or to what entity a participant wishes their assets to be transferred in the event of death? Unfortunately, numerous issues arise in connection with the simple task of designating a beneficiary.
Three retirement options for employees in Puerto Rico: Pros and cons
Many U.S. employers maintain operations in Puerto Rico. Employees frequently are hired in Puerto Rico, and some employees are transferred from the United States to Puerto Rico.
Employers should review severance plans in light of IRS guidance
Most employers are aware that Section 409A of the Internal Revenue Code requires all forms of nonqualified deferred compensation plans to be amended and restated prior to Dec. 31, 2008.
Legal Alert: Severance benefits receive a regulatory facelift
Most employers are aware that Section 409A of the Internal Revenue Code requires all forms of nonqualified deferred compensation plans to be amended and restated prior to Dec. 31, 2008.
Legal Alert: Foreign work experience raises retirement and tax issues
U.S. employees frequently are transferred to foreign affiliates to obtain experience and to bring home local knowledge from foreign countries. Conversely, employees are transferred from foreign affiliates to U.S. headquarters for similar reasons.
Transfers to, from foreign countries raise retirement and tax issues
In the current global economy, many employers are faced with difficult questions regarding foreign transfers.
Legal Alert: Plan guidance on using settlement restitution
In recent years, the Securities and Exchange Commission has been aggressively taking action against various mutual fund companies, alleging late trading and market-timing activities. These actions usually result in settlement agreements between the mutual funds and the SEC.