The Employee Retirement Income Security Act of 1974, as amended (“ERISA”) does not explicitly require that fiduciaries carry fiduciary liability insurance. However, given the risks taken by fiduciaries, the insurance may be considered money well spent. In fact, plan administrators and others may consider the existence of fiduciary liability insurance before hiring a service provider for their plan. In this article, Read More
Executive Compensation and the IRS
Executive compensation packages often include alternative forms of compensation on top of a salary arrangement. In fact, strategically-designed and legally-compliant executive compensation programs are the key to long-term business stability and growth. However, including compensation like stock options, deferred compensation, fringe benefits may alter how the Internal Revenue Service views and treats the Read More
The Fiduciary Role in the Post-DOL Fiduciary Rule Era
In 2016, the United States Department of Labor published a new regulation commonly called the Fiduciary Rule. Also known as the Conflict of Interest Rule, the regulation was intended to expand the definition of investment advice fiduciary under ERISA to include additional professionals associated with finance. However, in March 2018, the Fifth Circuit Court of Appeals heard a case brought by the U. S. Chamber of Read More
Is Your Benefit Plan Subject to ERISA?
Employee benefit plans are often used to attract and retain key employees, as well as providing significant tax advantages to employers. Although benefit plans are not mandated by the government, federal laws do address the administration of certain plans. For example, the Employee Retirement Income Security Act of 1974 and its subsequent amendments impose a number of rules and minimum standards. An employer that Read More
The Fate of Qualified Retirement Plans During a Merger or Acquisition
What happens to qualified retirement plans when companies go through a merger or acquisition? That may depend on the answers to the following questions: Is the plan a qualified retirement plan? A retirement must comply with the Internal Revenue Code in order to be considered qualified. Not only must the plan documents meet IRS requirements, but the company must follow the plan’s provisions. When in doubt, companies Read More
Avoid These ERISA Compliance Pitfalls
ERISA consists of the initial law, several amendments, and a massive number of regulations. Compliance is mandatory for most plans. Non-compliance usually results in harsh penalties or even criminal indictments. This article explores some common ERISA compliance pitfalls. Failing to Provide COBRA Notices Employees who no longer qualify for employer-paid health insurance may continue their coverage under the Read More
IRS Updates Health and Welfare Benefit Plan Limits
To avoid costly penalties and administratively burdensome correction procedures, plan sponsors must remain up-to-date with respect to applicable Health and Welfare plan limits. Earlier this year, the IRS announced cost-of-living adjustments affecting the 2019 dollar limitations for Health and Welfare plans and other related Health and Welfare Benefits items. We've included some of the most commonly used business Read More
How Does an ESOP Work?
An employee stock ownership plan, commonly known as an ESOP, is a retirement plan that is somewhat similar to a 401(k). However, an ESOP is usually company-funded with stock from the employer. Although ESOPs have been in use for years, misconceptions exist as to how an ESOP works. Forming an ESOP The employer company sets the ESOP in motion by creating an employee stock ownership trust (ESOT), which is sometimes Read More
The Employee Benefits Security Administration’s Role in ERISA Compliance
The Employee Benefits Security Administration (EBSA) is just one of the divisions operating under the United States Department of Labor. The EBSA’s mission, as stated on its website, is: “to assure the security of the retirement, health and other workplace related benefits of America’s workers and their families. We will accomplish this mission by developing effective regulations; assisting and educating workers, Read More
Are You Meeting ERISA Deadlines?
The Employee Retirement Income Security Act of 1974 (“ERISA”) sets minimum standards for many private industry pension and health plans. ERISA regulations also set deadlines for the submission of many reports and forms. Since penalties for ERISA compliance violations can be severe, it’s important to know whether your retirement plans are meeting ERISA deadlines. First, we can look at the types of deadlines that Read More
