HEART Act Affects Qualified Plans, Health FSAs, and Military Differential Pay - 08/08
Employee Benefits & Executive Compensation
August 11, 2008
Richard L. Arenburg
Christopher J. Rylands
In June, the President signed the Heroes Earnings Assistance and Relief Tax Act ("HEART Act") into law. The HEART Act amends certain provisions that were added by the Uniformed Services Employment and Reemployment Rights Act of 1994.
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Section 409A Compliance Deadline: December 31, 2008 - 06/30/08
Employee Benefits & Executive Compensation
July 1, 2008
Edmund Emerson III
Christopher J. Rylands
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IRS Releases Notice 2007-86: Additional 409A Transition Relief - 10/25/07
Employee Benefits and Executive Compensation
October 25, 2007
Paul F. Concannon
Christopher J. Rylands
On October 22nd, the IRS announced in Notice 2007-86 that it is further extending the transition relief under Section 409A of the Internal Revenue Code for nonqualified deferred compensation arrangements. The extension generally permits plans to be operated through December 31, 2008 in good faith compliance with Section 409A, as long as the plans are amended on or before December 31, 2008 to comply with Section 409A.
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2008 Cost-of-Living Adjustments Announced - 10/07
Employee Benefits and Executive Compensation
October 19, 2007
Christopher J. Rylands
The IRS has recently announced the cost-of-living adjustments applicable to dollar limitations for tax-qualified retirement plans.
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409A Update: Action Required by December 31, 2007 - 10/07
Employee Benefits and Executive Compensation
October 2, 2007
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Jennifer Faucett
Castles R. Hollis
Christopher J. Rylands
Steven G. Schaffer
on September 10, 2007, the IRS issued Notice 2007-78 (the "Notice") and granted limited relief for bringing nonqualified deferred compensation plans into written compliance with Section 409A of the Internal Revenue Code. However, the Notice still requires most major decisions be made and documented before December 31, 2007.
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Are you Ready for Section 409A? - 07/03/07
Employee Benefits & Executive Compensation
July 3, 2007
Jennifer Faucett
Steven G. Schaffer
The IRS recently issued final regulations interpreting the requirements imposed on nonqualified deferred compensation arrangements by Section 409A of the Internal Revenue Code. The final regulations are effective January 1, 2008.
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Third Circuit Ruling: When Does the Fiduciary Exception to the Attorney-Client Privilege Not Apply? 04/09/07
Health Care
April 10, 2007
Paige Arden Stanley
Under the common-law evidentiary rule known as the "fiduciary exception" to the attorney-client privilege, certain fiduciaries who obtain legal advice during the execution of their fiduciary obligations may not thereafter assert the attorney-client privilege against their beneficiaries.
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New Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plan - 02/12/07
Employee Benefits & Executive Compensation
February 12, 2007
Christopher J. Rylands
Steven G. Schaffer
The Tax Relief and Health Care Act of 2006 that was signed into law late last year made a change in the reporting requirements for stock transferred pursuant to an incentive stock option or under an employee stock purchase plan.
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Pension Protection Act of 2006: Changes for Defined Contribution Plans - 12/15/06
Employee Benefits & Executive Compensation
December 15, 2006
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Castles R. Hollis
Christopher J. Rylands
Steven G. Schaffer
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2007 Cost-Of-Living Adjustments Announced - 10/23/06
Employee Benefits & Executive Compensation
October 23, 2006
Paul F. Concannon
Edmund Emerson III
Christopher J. Rylands
The Internal Revenue Service has recently announced the cost-of-living adjustments applicable to dollar limitations for tax-qualified retirement plans. The limits are generally effective January 1, 2007 (or in some cases applicable, for plan years beginning on or after January 1, 2007.)
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Proposed Department of Labor Regulations Re: Default Investment Alternatives - 10/20/06
Employee Benefits & Executive Compensation
October 19, 2006
Christopher J. Rylands
Steven G. Schaffer
The Pension Protection Act of 2006, which was signed into law on August 17, 2006, made many significant changes to retirement plans. Of particular note, and the subject of this Alert, is a new fiduciary safe harbor which was added to ERISA.
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IRS Extends Section 409A Transition Relief - 10/06/06
Employee Benefits & Executive Compensation
October 6, 2006
Edmund Emerson III
Steven G. Schaffer
On October 4th, the IRS announced in Notice 2006-79 that they are further extending the transition relief under Section 409A of the Internal Revenue Code for nonqualified deferred compensation arrangements. According to the Notice, the IRS expects to issue the final regulations before the end of 2006 and the final regulations will not be effective until January 1, 2008.
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Antidilution Provisions Pack a Strong Punch Under Recent Interpretations of FAS 123R - 09/19/06
Employee Benefits & Executive Compensation
September 19, 2006
Steven G. Schaffer
According to recent accounting firm interpretations of the Statement of Financial Accounting Standards No. 123R, Share Based Payment adjustment of the terms of equity-based awards following an equity restructuring event could cause companies to recognize significant compensation cost.
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Change in Pension and Other Post Employment Benefit Accounting Principles - 04/12/06
Employee Benefits & Executive Compensation
April 12, 2006
Paul F. Concannon
Christopher J. Rylands
Steven G. Schaffer
On March 31, 2006, the Financial Accounting Standards Board (FASB) released an exposure draft of its new position on accounting for defined benefit pension plans and other post employment benefits (OPEBs) (such as retiree health care plans). FASB has invited public comments on this draft and hopes to have a final draft released in September 2006.
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Reminders for HIPAA Compliance - 03/24/06
Employee Benefits & Executive Compensation
March 24, 2006
Edmund Emerson III
Christopher J. Rylands
Steven G. Schaffer
Sponsors of small health plans (plans with under $5 million in annual receipts) required to comply with the HIPAA Privacy Rule must be in compliance with the HIPAA Security Rule by April 20, 2006.
The HIPAA Privacy Rule requires group health plans to remind participants of the availability of the plan's Notice of Privacy Practices (the "Privacy Notice"), as well as how to obtain a copy, every three years. Health plan sponsors may satisfy this requirement by distributing the reminder or Privacy Notice annually.
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Application of Deferred Compensation Rules under Code Section 409A to Separation Pay Arrangements - 02/06/06
Employee Benefits & Executive Compensation
February 6, 2006
Edmund Emerson III
Steven G. Schaffer
The Treasury Department and the Internal Revenue Service have issued proposed regulations regarding the application of Section 409A of the Internal Revenue Code to nonqualified deferred compensation plans or arrangements.
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Medicare Part D Creditable Coverage Disclosure to CMS Required by March 31, 2006 - 02/06/06
Employee Benefits & Executive Compensation
February 3, 2006
Christopher J. Rylands
Steven G. Schaffer
The Centers for Medicare and Medicaid Services (CMS) recently released guidance regarding creditable coverage disclosures to CMS by employer-sponsored group health plans and most other entities providing prescription drug coverage to individuals eligible for Medicare Part D. CMS generally requires these entities to file a creditable coverage disclosure with CMS both annually (whether or not such coverage is creditable) and when the creditable coverage status of the prescription drug coverage changes. An initial disclosure notice to CMS must be made by March 31, 2006.
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New Guidance Issued on Deferred Compensation Rules Under Code Section 409A - 10/31/05
Employee Benefits Client Alert
October 31, 2005
The Treasury Department and the IRS recently issued long-awaited proposed regulations regarding the application of Section 409A of the Internal Revenue Code (the "Code") to nonqualified deferred compensation plans or arrangements. This Client Alert focuses on the items that must be completed in 2005 to comply with Section 409A and addresses the transitional rules and revised deadlines provided for under the proposed regulations.
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2006 Cost-of-Living Adjustments Announced 10/21/05
Employee Benefits & Executive Compensation
October 21, 2005
Edmund Emerson III
Steven G. Schaffer
The Internal Revenue Service has recently announced the cost-of-living adjustments applicable to dollar limitations for tax-qualified retirement plans. The limits are generally effective January 1, 2006 (or in some cases applicable, for plan years beginning on or after January 1, 2006).
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Hurricane Katrina Relief: IRS Announcement and New Legislation Provide Guidance and Relief for Affected Employees With Assets in Qualified Retirement Plans - 10/14/05
Employee Benefits & Executive Compensation
October 14, 2005
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Castles R. Hollis
Steven G. Schaffer
Effective September 15, 2005, certain qualified plans may make loans and hardship distributions to employees or former employees affected by Hurricane Katrina which otherwise would not be permitted under existing plan terms.
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Cafeteria Plans: Treasury Regulations Modified to Allow Participants Longer to "Use It" Before They "Lose It" - 08/31/05
Employee Benefits & Executive Compensation
August 30, 2005
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Castles R. Hollis
Steven G. Schaffer
Effective for the current plan year and forward, cafeteria plans may be amended to provide limited relief from the "use it or lose it" rule that applies to flexible spending accounts. The rule prior to this change required that contributions to a flexible spending account offered under a cafeteria plan, such as to a medical reimbursement account or dependent care account, were only available to reimburse expenses incurred during the plan year for which the contributions were made. If contributions to these accounts exceeded the expenses that a participant incurred during the year, the excess was forfeited by the participant. This rule became known as the "use it or lose it" rule.
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Roth Contributions to 401(k) Plans - 06/15/05
Employee Benefits & Executive Compensation
June 15, 2005
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Castles R. Hollis
Steven G. Schaffer
Beginning in 2006, 401(k) plans (and 403(b) plans) may permit participants to designate some or all of their employee contributions as "Roth contributions." This law change was one of the numerous changes to the rules governing qualified plans made by the Economic Growth and Tax Relief Reconciliation Act of 2001. The IRS recently issued proposed regulations that provide its first round of guidance on Roth contributions to 401(k) plans.
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HIPAA Portability Final Regulations - 05/16/05
Employee Benefits & Executive Compensation
May 16, 2005
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Castles R. Hollis
Steven G. Schaffer
The federal agencies enforcing HIPAA's "portability" requirements have issues final regulations that will become effective for plan years beginning on or after July 1, 2005.
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Banks Should Reassess their BOLI and Benefit Plans After Recent Interagency Statement and New 409A Rules - 4/15/05
Financial Institutions Client Alert
April 15, 2005
On December 7, 2004, the OCC, Federal Reserve, FDIC, and OTS issued a joint "Interagency Statement on the Purchase and Risk Management of Life Insurance." Given the recent enactment of new tax rules governing nonqualified deferred compensation plans under Section 409A of the Internal Revenue Code and the issuance of the Interagency Statement, we would advise our bank clients to undertake an independent review and reassessment of their BOLI and benefit plans during 2005.
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HIPAA Security Rule Preparedness - 03/21/05
Employee Benefits & Executive Compensation
March 21, 2005
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Castles R. Hollis
Steven G. Schaffer
REMINDER: Companies Must Comply with HIPAA's Security Rule deadline by April 20, 2005.
What must be done by April 20, 2005: Written Security Policies & Procedures; Plan Documents; Business Associate Agreements; Security Official; Workforce Training.
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Action Required For New Automatic Rollover Rules - 02/09/05
Employee Benefits & Executive Compensation Client Alert
February 9, 2005
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Edmund Emerson III
Steven G. Schaffer
Tax-qualified retirement plans are permitted to provide for a mandatory cash-out distribution of a participant's benefit under the plan without the participant's consent following a participant's termination of employment if the benefit is $5,000 or less. The Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") changed the rules for mandatory cash-out distributions to participants in tax-qualified retirement plans.
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Non-Qualified Deferred Compensation Plans - 10/04
Emp. Benefits & Exec. Compensation
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Castles R. Hollis
Steven G. Schaffer
On October 22, 2004, President Bush signed the American Jobs Creation Act which has created the need for significant changes to many nonqualified deferred compensation plans and arrangements before the end of 2004.
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2005 Cost of Living Adjustments Announced - 11/04
Emp. Benefits & Exec. Compensation
Richard L. Arenburg
Armin G. Brecher
Paul F. Concannon
Castles R. Hollis
Steven G. Schaffer
The IRS recently announced the cost-of-living adjustments applicable to dollar limitations for tax-qualified retirement plans.
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Charging Participants' Accounts for Plan Expenses - 05/03
Emp. Benefits & Exec. Compensation
On May 19, the Department of Labor ("DOL") issued a Field Assistance Bulletin (FAB 2003-3) that significantly changes the DOL's position on charging participants' accounts for certain plan-related expenses.
Our Client Alert (in PDF format) details the DOL's new position.
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Impact Of The Sarbanes-Oxley Act of 2002 on Executive Compensation Matters Of Public Companies - 09/02
Emp. Benefits & Exec. Compensation
The Sarbanes-Oxley Act (the "Act") was signed into law by President Bush on July 30, 2002.
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DOL Letter 2001-01A - 01/01
Emp. Benefits & Exec. Compensation
On January 18, 2001, the Department of Labor issued a new advisory opinion (DOL Letter 2001-01A) and additional guidance, in the form of six hypothetical case studies, which clarify what expenses can be properly charged to a plan. This guidance is extremely critical and timely given the announced audit initiative in many regional Department of Labor offices to apply a stricter standard in determining the propriety of expenses paid for with plan assets (see PGFM e-mail release dated December
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IRS Notice 2001-14 - 01/01
Emp. Benefits & Exec. Compensation
On January 18, 2001, the Internal Revenue Service ("IRS") announced In IRS Notice 2001-14, that FICA taxes, FUTA taxes (i.e. payroll taxes) and income tax withholding will not apply to the exercise of incentive stock options described in Section 422 of the Internal Revenue Code or purchases of stock under an employee stock purchase plan (an "ESPP") prior to January 1, 2003.
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Department Of Labor Changes Course On Plan Expenses - 12/00
Emp. Benefits & Exec. Compensation
The Department of Labor (DOL) has recently begun to aggressively audit employer maintaining employee benefit plans concerning which expenses can be paid out of plan assets.
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Optional Forms Of Payment May Be Eliminated In Defined Contribution Plans - 09/00
Emp. Benefits & Exec. Compensation
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California Short Term Disability - 07/00
Emp. Benefits & Exec. Compensation
California recently enacted a statute (California Labor Code Section 233, effective January 1, 2000) that allows employees to use sick leave to care for the illnesses of their spouse, children, or parents.
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Deadline To Amend Plans For New Law Changes Extended - 06/00
Emp. Benefits & Exec. Compensation
On June 9th, the Internal Revenue Service released Revenue Procedure 2000-27 which extended the deadlinefor plan sponsors to amend tax-qualified retirement plans for changes required by the Uruguay Round Agreements Act ("GATT"), the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, and the Internal Revenue Service Restructuring and Reform Act of 1998 (collectively referred to as "GUST").
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IRS Liberalizes Same Desk Rule - 05/00
Emp. Benefits & Exec. Compensation
On May 8th, the Internal Revenue Service released Revenue Ruling 2000-27 which greatly liberalizes the rules for making distributions to 401(k) plan participants who cease to be employed by the company maintaining the plan as a result of a sale of assets. Revenue Ruling 2000-27 is available at http://www.benefitslink.com/IRS/revrul2000-27.shtml
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Final Rules on Accepting Rollovers Released - 04/00
Emp. Benefits & Exec. Compensation
On April 20th, the Internal Revenue Service published final regulations under Section 401(a)(31) of the Internal Revenue Code that simplify the steps a plan administrator has to take before accepting a rollover distribution.
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Department Of Labor Publishes Enforcement Priorities - 04/00
Emp. Benefits & Exec. Compensation
On April 5th, the Department of Labor published its revised Strategic Enforcement Plan.
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Voluntary Fiduciary Correction Program Released - 03/00
Emp. Benefits & Exec. Compensation
On March 14th, the United States Department of Labor (the "DOL") released the Voluntary Fiduciary Correction ("VFC") program that allows fiduciaries of employee benefit plans to correct voluntarily breaches of ERISA without having civil monetary penalties assessed
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Automatic 401(K) Deferrals - 01/00
Emp. Benefits & Exec. Compensation
An automatic deferral (also known as a negative election) feature in a 401(k) plan provides that unless there is an affirmative election by an employee to the contrary, the employer automatically withholds a certain percentage (e.g., 3%) from that employee's pay and defers it as a 401(k) contribution.
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Year End Reminders - 12/99
Emp. Benefits & Exec. Compensation
In late October, we sent two emails addressing certain cost of living increases announced by the IRS. Last week, the IRS confirmed that the increase in the threshold for determining highly compensated employees ("HCEs") from $80,000 to $85,000 applies to lookback years beginning on or after January 1, 2000.
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Notice Requirement Under The Women's Health and Cancer Rights Act of 1998 - 11/99
Emp. Benefits & Exec. Compensation
In 1998, Congress passed the Women's Health and Cancer Rights Act of 1998 which required group health plans and health insurance issuers that provide medical and surgical benefits for mastectomies to also provide coverage for reconstructive and prosthetic benefits related to these operations.
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IRS Clarifies Highly Compensated Employee Threshold Increases - 11/99
Emp. Benefits & Exec. Compensation
On October 20, we sent an e-mail release which contained certain cost of living increases announced by the IRS (the original release is reproduced below) effective January 1, 2000
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Social Security Wage Base Increase - 11/99
Emp. Benefits & Exec. Compensation
The IRS recently announced an increase in the Social Security Wage Base (on which Social Security payroll taxes are calculated) to $76,200 for 2000.
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