Understanding Employee Benefits

Section 409A Tax Assessed on Discounted Stock Options – Taxpayer Sues for Refund in Federal Court of Claims

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Code Section 409A which was effective in January 1, 2005, provides strict rules that must be applied to most deferred compensation arrangements accruing benefits after the effective date. Failure to comply with the Code and the applicable Treasury Regulations can result in a 20% surtax plus interest on the amounts... Read More

Topics: Deferred Compensation and 409A, ERISA and Other Benefits Litigation, Executive Compensation, Payroll

Self-Funded Plans Need to be Careful in Enforcing Subrogation Rights

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A recent Eighth Circuit Court of Appeals decision considered the situation of a participant covered under a self‑funded ERISA plan who sustained injuries in a slip and fall accident. The plan paid health benefits for that accident. The participant also obtained compensation by settling a civil lawsuit. Like many self‑funded... Read More

Topics: ERISA and Other Benefits Litigation, Health Plan

Department of Labor Withdraws Controversial Guidance On Self-Directed Brokerage Accounts in 401(k) Plans

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On May 7, 2012 the Department of Labor issued a set of questions and answers via Field Assistance Bulletin FAB No. 2012-02 (http://www.dol.gov/ebsa/regs/fab2012-2.html) concerning the new fiduciary fee disclosures in Labor Regulations §2550.408(b)-2 and participant fee disclosure requirements outlined in Labor Regulations §2550.404(a)-5. Q&A 30 of the May 7th FAB... Read More

Topics: ERISA and Other Benefits Litigation, Fiduciary Guidance, Retirement Plans

It is Always Good to Follow the Plan’s Claims Procedure in Denying a Claim

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A recent Eighth Circuit Court of Appeals decision involved high ranking executives who participated in a company’s long-term incentive plan. Under the plan agreements, executives who did not continue employment for a three year performance period forfeited benefits under the plan unless they qualified for a pro-rated award. A pro-rated... Read More

Topics: Compensation Questions, Deferred Compensation and 409A, ERISA and Other Benefits Litigation, Executive Compensation

Participants Are Entitled to Specific Information About Their Service Credit Even Before They Are Entitled to Their Pensions

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In a recent federal district court case, Whirlpool Corporation closed a factory and notified a number of former employees about the status of their pensions, including their years of credited service. The corporation’s records differed from the service records maintained by the union. Approximately five years after the factory closed,... Read More

Topics: ERISA and Other Benefits Litigation, Retirement Plans

Key Provisions of the Affordable Care Act Upheld by U.S. Supreme Court

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            Last Thursday, June 28, in a 5-4 decision, the U.S. Supreme Court found that the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act” or “Act”) is constitutional paving the way for final implementation of its provisions. http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf While the Administration argued that the Act was... Read More

Topics: ERISA and Other Benefits Litigation, Health Care Reform, Health Plan, Welfare Plans

If the Tax Withholding is Wrong, Don’t Rely on the Employer to Fix it

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Verizon Communications, Inc. sponsored a number of plans for its foreign employees. These employees were citizens of foreign countries who never worked in the United States. Because these employees never worked or resided in the United States, their employment income and the benefits from their retirement plans were foreign source... Read More

Topics: ERISA and Other Benefits Litigation, Payroll, Retirement Plans