A 403(b) plan is named after the Internal Revenue Code (IRC) Section 403, which details the plan. Essentially, a 403(b) plan is a retirement plan that allows employees to make contributions on a pre-tax basis, similar to a 401(k) plan. 403(b) plans sponsored by governmental and public education e...
Check out my article published in the September/October 2017 edition of NALA's Facts & Findings magazine!
Many companies offer retirement benefit plans to their employees. However, standardized retirement benefit plans may not have the same appeal to executives as they would to regular employees. Executives are increasingly offered targeted retirement benefits that benefit both the company and the ex...
Dealing with complex federal regulations, like ERISA, is anything but simple. However, there are some important things for plan administrators, employers, and Plan Participants to know about when facing the possibility of ERISA litigation. When the potential for litigation over an ERISA plan aris...
Mediating ERISA disputes has unique challenges compared to mediating other types of civil claims. Some attorneys representing the employer use mediation as a way to flex their litigation muscle, coming down hard on the employee. However, mediation should be used as a way to resolve a complaint be...
Failure to Maintain Plan Documentation It is important for plan sponsors to have a general understanding of their fiduciary responsibilities to plan participants. These include making sure to avoid conflicts of interest, diversifying investments, and acting in the best interests of plan particip...
There are a number of benefits associated with employee stock ownership plans (ESOPs) for companies. In general, an ESOP can be a benefit to owners, employees, and the company overall. However, ESOPs can present some problems and complications. Understanding the potential pitfalls of an ESOP can ...
Acting as a fiduciary for a qualified retirement plan involves a number of important responsibilities. However, making even simple fiduciary decisions can have serious consequences. Failing to follow best practices may leave a fiduciary personally liable for losses to the plan and result in remov...
The Supreme Court has offered some guidance and clarification on the fiduciary standards for Employee Stock Ownership Plans (ESOPs). After the 2014 Dudenhoeffer decision, ESOP fiduciaries lost their presumption of prudence that protected most ESOP fiduciary decisions. However, the Court also rais...
Opinion letters provide determinations as to the qualification of retirement plans as adopted by employers. The IRS recently released Rev. Proc. 2017-41, setting forth the procedures for issuing Opinion Letters regarding the qualification of certain pre-approved retirement plans. These changes ar...
Many common retirement savings plans are subject to required minimum distributions (RMDs). This includes traditional IRAs, SEP and SIMPLE IRAs, as well as 401(k)s, 403(b)s, and other defined contribution plans. Once youve reached the mandatory age for taking withdrawals from your IRA or retireme...
There are a number of retirement plans offered by employers, including pension, profit sharing, and 401(k) plans. While many companies offer 401(k) or 403(b) retirement plans, the lesser known 457 plans provide an alternative retirement plan option for many governmental and non-profit employees. ...
Earlier this month, we wrote about ESOPs as a succession planning tool for construction company owners. However, there are a number of other reasons why construction and manufacturing companies are turning to ESOPs beyond succession planning. An Employee Stock Ownership Plan (ESOP) is a qualifie...
In addition to the many other local, state, and federal filings, businesses with benefits plans may be required to file an annual Form 5500 to report their pension and welfare plans' financial condition, investments, and operations. Late filings, unfiled reports, and incomplete filings can expose...
A pension plan is a defined benefit or defined contribution retirement plan. Typically, contributions are made to an employee's pension plan over the course of their life with a company, with benefit to be paid out after the employee retires or reaches a certain age. However, if the company freez...
Employee Stock Ownership Plans (ESOPs) offer a number of advantages for business owners, employees, and the company overall. However, some small businesses may consider themselves too small to justify the costs of transitioning to an ESOP company. A direct sale to key employees may be a way for s...
Succession planning for your business can seem like a complex and time-consuming process. For many business owners, including construction company owners, succession planning takes a back seat to the day-to-day business operations. However, it is important to plan for an exit strategy to ensure c...
The federal protections of ERISA protect retirement assets from most creditors under the anti-alienation provision, section 206(d)(1). However, not all retirement plan contributions are protected from all creditors of fraudulent transfers to avoid creditors are generally not protected. Moreover, ...
Starting June 9, 2017, the transition period for the new Department of Labor fiduciary rules began, with full implementation by January 1, 2018. A primary component of the new fiduciary rules is the Best Interest Contract Exemption (BICE), which allows otherwise so-called “conflicted compensation...
The Employee Retirement Income Security Act of 1974 (ERISA) establishes the minimum standards for most voluntary private pension and health plans. Among ERISA's many requirements, plan providers and fiduciaries must provide procedures for deciding claims and appealing decisions. Once all appeals ...
Equitable estoppel is a legal doctrine where a party who relies on the misrepresentation of another should not be harmed as a result. The doctrine has a long history, but limited application in ERISA litigation. ERISA does not explicitly provide for “equitable estoppel” as a remedy for plan parti...
There are a number of reasons why a company decides to convert to an S corporation from a C corporation. An S-Corp may provide tax advantages over a C-Corp. C-Corps are generally subject to double taxation, while S-Corps are pass-through entities for federal tax purposes. (S-Corps are subject to ...
The federal estate tax is assessed on an individual's property and assets after they die. According to the Office of Management and Budget, in 2014, the estate tax generated over $19 billion at the federal level. However, in reality, most taxpayers never come close to paying estate taxes because ...
Historically, a number of large hospital systems in the U.S. were established by churches or religious organizations. The Employee Retirement Income Security Act of 1974 (ERISA) regulates most private employer retirement and benefits plans. ERISA mandates minimum funding and reporting requirement...
Offering employees stock options can be a valuable incentive to attract employees and reward loyalty. A typical stock option grant provides that a certain employee has an option to acquire X number of shares in the company at Y price per share. The options are generally vested over a specified pe...